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Decoding CDR Reports and Correcting Data

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Decoding CDR Reports and Correcting Data

Why Review Your CDR Data

– High CDR could result in • Adverse publicity• Loss of Title IV eligibility• Loss of access to private loan funds• Extra work

Administrative capability

Why Review Your CDR Data

– Correct data– Accurate data– Timely data

Administrative capability

Better-quality decision-making

Why Review Your CDR Data

– When borrowers default• Pay more in interest and collections fees• Government can seize wages, tax refunds, Social

Security, and disability benefits

Administrative capability

Better service to students

Better-quality decision-making

Objectives

• Understand Cohort Default Rate (CDR) cycle

• Decode Loan Record Detail Report• Learn how to collect, compare, and

correct data • Know common appeal errors to avoid

Understanding the Cohort Default Rate Cycle

What Is a Cohort Default Rate?

The Numerator is the number of Stafford loan

borrowers from the denominator who

default within a cohort period

The Denominator is the number of

Stafford loan borrowers who enter repayment within a

cohort period

= Did not

default

in 2011-2013

= Defaulted

in 2011

= Defaulted

in 2012

= Defaulted

in 2013

All borrowers entered

repayment in 2011

What Is a Cohort Default Period?

Borrowers who entered repayment between

10/01/2010 and 9/30/2011

Borrowers who entered repayment between

10/01/2010 and 9/30/2011

Borrowers who entered repayment between

10/01/2010 and 9/30/2011 and who defaulted

between 10/01/2010 and 9/30/2012

2-year CDR Example FY2011

Borrowers who entered repayment between

10/01/2010 and 9/30/2011 and who defaulted

between 10/01/2010 and 9/30/2013

3-year CDR Example FY2011

What Is a Cohort Default Rate Cycle?

• Department sends draft and official cohort default rates to schools– Eligible to participate in any of the Title IV programs – Borrower in repayment in the current or any of the

past cohort default rate periods

February August

Draft default rates released to schools only

Official rates released to schools and the general public

September January

Draft Rate Cycle Official Rate Cycle

Source: CDR Quick Reference Guide

What Is a Cohort Default Rate Cycle?

• Official cohort default rates are available at:– ed.gov/FSA/defaultmanagement/cdr.html

Source: CDR Quick Reference Guide

February August

Draft default rates released to schools only

Official rates released to schools and the general public

September January

Draft Rate Cycle Official Rate Cycle

No Sanctions or Benefits Associated with Draft CDR

• Keep in mind– Schools that fail to challenge accuracy of

draft rate data through incorrect data challenge can’t contest accuracy of official rate data

Fiscal

Year (FY)

Denominator # in

Repayment

Numerator # in Default

Draft CDR Publicatio

n Date

Official CDR

Publication Date

Rate Used for

Sanctions

2010 10/01/09 – 09/30/103-yr: 10/01/09 –

09/30/123-yr: Feb

20133-yr: Sept

2013N/A

2011 10/01/10 – 09/30/11

2-yr: 10/01/10 – 09/30/12

3-yr: 10/01/10 – 09/30/13

2-yr: Feb 2013

3-yr: Feb 2014

2-yr: Sept 2013

3-yr: Sept 2014

2-yr rate (25%)

3-yr rate (30%)

2012 10/01/11 – 09/30/123-yr: 10/01/11 –

09/30/143-yr: Feb

20153-yr: Sept

20153-yr rate

(30%)

Publication of CDRs

How Are Schools Notified?

• CDR notification packages – Sent electronically to all domestic schools

(eCDR)• Student Aid Internet Gateway (SAIG)• 5 business days to report problems• Challenges, adjustments, and appeals begin 6th

day following announced transmission date– Posted on IFAP (ifap.ed.gov)

What is Included in the eCDR?

• CDR package includes– Cover letter– Two Loan Record Detail Reports (LRDR)

• Reader-friendly• Extract-type

• CDR package includes– SHDRLROP– SHCDRROP– SHCDREOP

– Cover letter– Loan Record Detail

Reports (LRDR)• Reader-friendly• Extract-type

Decoding the Loan Record Detail Report

Loan Record Detail Report (LRDR)

• Contains borrower information for Stafford loans used to calculate draft or official cohort default rate– Includes borrower’s

• Name, Social Security number• Date borrower entered repayment• Date of default (if applicable)• Loan type

– Borrowers with multiple loans counted only once

Review LRDR

• Check for accuracy• Compare to school records

– Repayment Date– Default Status– Cancellations/Refunds

What is Included in the eCDR?

• Beginning with the FY 2009 cohort – MUST use eCDR

appeals to prepare and submit challenges or adjustments

Reader-Friendly LRDR

Loan Record Detail Report – Data Manager

• Three-digit code used to identify entity reporting the information

Guaranty Agency Department of Education

Loan Record Detail Report – Repayment Date

• Indicates when borrower began repayment • Determines if loan is included in denominator

Loan Record Detail Report – Default Date

• Indicates the date– Direct Loan considered in default based on past due status

OR

– Guarantee agency paid default claim to lender for FFELP Loan

Loan Record Detail Report – CDR Usage

• Indicates how loan is included in calculation– “D” Denominator only – “B” Both Numerator and Denominator – “N” Not Used – “E” Eligible, but not counted

Important Codes to Know

Source: CDR Guide, page 2.3-7

Important Codes to Know

Source: CDR Guide, page 2.3-8

Collecting and Comparing Data

Collecting the Data

• Determine data that needs to be captured– Last date of attendance (LDA)– Less than half-time date (LTH)– Withdrawal date (WD)– Date entered repayment (DER)– Claim paid date/default date (CPD/DD)

• Spreadsheet or database to collect data– Implement this process early

Collecting the Data

– Internal resources available on-campus

– External resources• NSLDS• Servicer reports• Guaranty agencies

Determine whereto find data

Possible Errors on LRDR

• LRDR incorrectly: – Reports data element and data element

should be changed– Includes borrower whose repayment date

does not fall within cohort fiscal year; borrower removed from calculation

– Excludes borrower who entered repayment within cohort; borrower added to calculation

Should the Loan be Included in FY09 3-year CDR?

Darin • Graduated from school 11/4/2008• NSLDS reveals transferred to another school

2/4/2009

LDA

11/4/2008

Date entere

d repayEstimate

d 5/5/2009

Date entered repayme

nt Actual

5/13/2010

Default date

5/8/2011

Transferred to other school

2/4/2009

Should the Loan be Included in FY09 3-year CDR? No

YDefaulted between 10/1/2008 – 9/31/2011• Defaulted 5/8/2011

NFY2009 (10/1/2008 – 09/31/2009)• Date Darin entered repayment

5/13/2010

If date of repayment is delayed by re-enrolling in school prior to the end of grace, inclusion in a CDR calculation is also delayed

Darin

Should the Loan be Included in FY09 3-year CDR?

• Left school 11/4/2008• Transferred to another school 1/12/2010• Loans deferred 1/12/2010

LDA

11/4/2008

Date entered

repayment

5/5/2009

Transferred to other schoolLoan

deferred 1/12/2010

Kara

Should the Loan be Included in FY09 3-year CDR? Yes

Deferments or forbearances do not alter the date the borrower entered repayment

N Defaulted between 10/1/2008 - 9/31/2011• No default

Y FY2009 (10/1/2008 – 09/31/2009)• Date Kara entered repayment 05/05/2009

Kara

Should the Loan be Included in FY09 3-year CDR?

• Withdrew from school 6/1/2008• Defaulted on loans 5/27/2010• Consolidated three loans 12/4/2010 in order to

regain Title IV eligibility

LDA

6/1/2008

Date entered repayme

nt 12/2/200

8

Default date

5/27/2010

Kyle

Consoldate

12/4/2010

Consolenters repay

2010

Should the Loan be Included in FY09 3-year CDR? Yes

YDefaulted between 10/1/2008 – 9/31/2011• Kyle defaulted 5/27/2010

YFY2009 (10/1/2008 – 09/31/2009)• Date Kyle entered repayment

12/02/2008

The date underlying loans entered repayment is the date used in the cohort default rate calculation

Kyle

Should the Loan be Included in FY09 3-year CDR?

• Graduated from school 6/1/2008• Paid loan in full on 7/1/2008

LDA

6/1/2008 12/2/2008

Date entered repayme

nt Loan paid

in full 7/1/2008

Harrah’s

Bethany

Should the Loan be Included in FY09 3-year CDR? No

The paid-in-full date becomes the new repayment date.Same is true for loans discharged due to death, bankruptcy, disability

Defaulted between 10/1/2008 – 9/31/2011• No default

FY2009 (10/1/2008 – 09/31/2009)• Date Bethany paid in full 07/01/2008

N

N

Bethany

Correcting Data

Challenges of Draft CDR

– Used to correct errors on draft CDR– Submitted to guarantors (FFEL) and/or DL

servicers via eCDR appeals within 45 days of timeframe begin date

• Relevant information for each borrower challenged• Supporting documentation for each borrower

challenged• CEO Certification Letter

Incorrect Data Challenge (IDC)

Challenges of Draft CDR

– Only available if school potentially subject to loss of eligibility (or provisional certification) based on draft rates

– Must send completed PRI Challenge to U.S. Department of Education within 45 days of timeframe begin date

• PRI Challenge Spreadsheet (CDR Guide page 4.2 – 8)

• Letter

Participation Rate Index Challenge (PRI)

Adjustments of Official CDR

– Ensures school’s official cohort default rate calculation reflects changes correctly agreed to as result of incorrect data challenge

– Must submit UDA to Department within 30 calendar days of timeframe begin date via eCDR appeals

Uncorrected Data Adjustment (UDA)

Adjustments of Official CDR

– Allows school to challenge accuracy of “new data” included in most recent official CDR

• Compare LRDR of draft CDR to LRDR of official CDR to determine if new data reported correctly

– Must submit NDA to Data Manager via eCDR appeals within 15 days of timeframe begin date

• Relevant information for each borrower challenged• Supporting documentation for each borrower challenged• CEO Certification Letter

New Data Adjustment (NDA)

Appeals of Official CDR

– Alleges school’s official cohort default rate includes defaulted loans considered improperly serviced for cohort default rate purposes

– Example• Borrower never made loan payment and school

can document that lender/servicer failed to complete due diligence

Loan Servicing Appeal (LS)

Appeals of Official CDR

– Must send request for loan servicing records to Data Manager and Department within 15 days of timeframe begin date

Loan Servicing Appeal (LS)

Appeals of Official CDR

– Data Manager notifies school and Department within 20 days of receipt

• Fees for providing records• List of representative sample• Description of how sample was chosen

– School must pay fee, if charged, within 15 days of data manager notification

Loan Servicing Appeal (LS)

Appeals of Official CDR

– Available if school is subject to loss of eligibility (or provisional certification) based on official rates

– School previously challenged accuracy of data as part of Incorrect Data Challenge

– Review of loan record detail reports for draft and official rates show new data

Erroneous Data Appeal (ER)

Appeals of Official CDR

– School must send Erroneous Data Appeal allegations to Data Manager within 15 days of timeframe begin date

• Erroneous Data Appeal spreadsheet• Relevant pages of Loan Record Detail Report• Supporting documentation• Letter

Erroneous Data Appeal (ER)

Appeals of Official CDR

– Available based on loss of eligibility or notice of second successive official rate potentially subjecting school to provisional certification

– School must submit independent auditor’s written opinion to Department within 30 days of timeframe begin date

• Spreadsheet of students that qualify to be included– School’s low-income rate and placement rate

(non-degree-granting school)– School’s low-income rate and completion rate

(degree-granting school)

Economically Disadvantaged Appeal (EDA)

Appeals of Official CDR

– Only available if school is subject to loss of eligibility or provisional certification based on official rates

– Must send completed Participation Rate Index Appeal to Department within 30 days of timeframe begin date

• Participation Rate Index Appeal spreadsheet• Letter

Participation Rate Index Appeal (PRI)

Appeals of Official CDR

– Subject to sanctions based on three consecutive

CDRs that meet or exceed relevant threshold if• At least two official cohort default rates are average rates

• CDRs would have been less than relevant threshold if calculated as

non-average rates

– School must send completed Average Rates Appeal

to Department within 30 days of timeframe begin date• Supporting documentation

• Certification

Average Rates Appeal

Appeals of Official CDR

– Department automatically determines if school meets criteria for thirty or fewer borrowers appeal

– School disagrees with Department’s determination

• Must send completed Thirty or Fewer Borrowers Appeal to Department within 30 days of timeframe begin date

– Supporting documentation– Certification

Thirty or Fewer Borrowers Appeal

Common Appeal Errors to Avoid

Avoid Two Common Errors

1) Check NSLDS for student's enrollment status– Students who have withdrawn or dropped to

less than half-time status may be taking classes that maintain their eligibility elsewhere

Two Common Errors

2) If two entities are listed for loan, make sure to send challenges to correct entity – Indicated with usage code of “B” rather than

“E”– Sending challenge to wrong servicer or

guarantor can result in missed deadline

Conclusion and Resources

Take Action

• Review LRDR • Compare defaulted borrowers to your

own system to ensure borrowers are listed correctly

• Submit timely appeals• Analyze defaulted borrowers to see

if changes are needed in default management plan

Resources

– ifap.ed.gov/DefaultManagement/DefaultManagement.html

– ecdrappeals.ed.gov

Default Prevention and Management

eCDR Appeals System

Thank You!