Cohort Default Rates and HEA Title IV Eligibility: Background and Analysis

December 12, 2023 R47874

Cohort Default Rates and HEA Title IV
December 12, 2023
Eligibility: Background and Analysis
Alexandra Hegji
Most institutions of higher education (IHEs) that participate in the federal Pell Grant and Direct
Analyst in Social Policy
Loan programs—the primary federal financial aid programs for postsecondary students—are

required to meet cohort default rate (CDR) requirements. The CDR is the primary federal
Sylvia L. Bryan
institutional accountability mechanism tied to the repayment of federal student loans. It is
Research Assistant
intended to evaluate institutional quality and the capacity of IHEs to administer federal student

aid programs. An IHE may lose its eligibility to participate in the Pell Grant and/or Direct Loan
programs if its CDR—the percentage of its federal student loan borrowers who enter repayment

on their loans in a given fiscal year and default on those loans within three years of entering
repayment—equals or exceeds specified thresholds.
A primary criticism of the CDR metrics as they are currently constructed and applied is that IHEs rarely fail them, and when
they do, they are rarely sanctioned for it. From 1992 to 1999 (early in the CDR’s use), 1,846 IHEs were subject to sanctions
due to high CDRs. For the FY2017 CDRs, 12 IHEs were subject to CDR sanctions. Possible explanations for this trend
include that high numbers of poorly performing IHEs may no longer be participating in the Title IV programs due to the
initial culling of high-CDR IHEs, that IHEs have adjusted their practices to meet the CDR requirements, and that the
expansion of student loan repayment flexibilities (e.g., income-driven repayment [IDR] plans) may make borrower default
less likely.
A closer examination of institutional performance under the CDR framework reveals that about 3% of IHEs had FY2017
CDRs approaching but not meeting the statutory threshold (i.e., equal to or greater than 25% but less than 30%). Private for-
profit less-than-two-year institutions made up the greatest share of these IHEs. Private nonprofit four-year, public four-year,
and private nonprofit two-year IHEs tended to have CDRs at or below the median CDR across all IHEs (9%). Public two-
year IHEs tended to have CDRs greater than the median but less than 20%—well below statutory thresholds. Private for-
profit (proprietary) four-year IHEs were somewhat evenly distributed on either side of the median. Across all institutions,
those IHEs with CDRs of 25% or higher had average rates of undergraduate students receiving Pell Grants compared to all
IHEs. Historically Black Colleges and Universities (HBCUs) were more likely than non-HBCUs to have CDRs of 25% or
higher.
Should Congress opt to address concerns about the CDR’s utility, it might explore a variety of adjustments to the CDR
framework.
• Adjusting CDR Thresholds: If the intent of the CDR framework is to weed out relatively poorly
performing (i.e., higher CDR) IHEs, lower CDR thresholds for the application of CDR sanctions would
presumably lead to more IHEs failing the stricter criteria.
• Supplementing the CDR: Incorporation of an additional measure that differentiates between IHEs with
high or low proportions of students borrowing federal student loans, or that differentiates IHEs with student
loan defaulters who owe larger or smaller amounts on their loans, may help students assess the relative risk
of loan default at particular IHEs. This might also help illuminate the relative risk of monetary loss for the
federal government as a lender.
• Eliminating the CDR: Developments in the federal student loan programs, such as the availability and
utilization of IDR plans, have led some stakeholders to assert that the CDR is “effectively worthless” as a
measure of institutional quality. It has become much easier for borrowers, even those who are struggling
economically, to avoid default. Congress might consider whether to eliminate the CDR altogether. Doing
so may free up administrative resources at the U.S. Department of Education and IHEs that are currently
devoted to CDR oversight and compliance but may lead to issues like increased incidents of fraud in the
federal student loan programs absent replacing the CDR with another federal student loan repayment
performance measure, such as a loan repayment rate.
• Amending the CDR Calculation: Altering the CDR calculation—for instance, by accounting for periods
of deferment of forbearance and/or by including PLUS Loans—may provide stakeholders with added
clarity to institutional performance under the CDR, as either potential adjustment would presumably more
fully encompass current borrower behaviors and experiences.
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Cohort Default Rates and HEA Title IV Eligibility: Background and Analysis

itle IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended), authorizes
the primary and largest (in terms of participation and dollars) federal programs that
T provide financial assistance (e.g., Pell Grants and Direct Loans) to students for obtaining a
postsecondary education at eligible institutions of higher education (IHEs).1 In academic year
2021-2022 (July 1, 2021-June 30, 2022), approximately 6,000 institutions participated in the Title
IV programs.2 In award year 2021-2022 (July 1, 2021-June 30, 2022), approximately $102 billion
was disbursed to students attending IHEs through the Title IV federal student aid programs.3
IHEs participating in the Title IV programs must meet a variety of requirements.4 Among these,
IHEs may be required to meet cohort default rate (CDR) requirements. Under the CDR
framework, an IHE may lose eligibility to participate in the Direct Loan and/or Pell Grant
programs if the percentage of its federal student loan recipients who default on their loans within
three years of entering repayment equals or exceeds specified thresholds. A CDR above the
specified thresholds may also affect an IHE’s participation in other Title IV programs.
The CDR is the primary federal institutional accountability mechanism tied to the repayment of
federal student loans. It is intended to evaluate institutional quality and capacity to administer
federal student aid programs. One of the assumptions underlying the CDR is that if an IHE is of
sufficient quality, it will provide its students with the skills to enable them to repay their loans.5 In
recent years, the CDR’s utility and design have been questioned by some Members of Congress,
and various stakeholders have suggested an array of changes to the CDR to strengthen it as an
institutional accountability tool. These proposals run the gamut from potentially eliminating the
CDR altogether and replacing it with another student loan-based institutional accountability
metric6 to updating how it is calculated to reflect new student loan borrowing patterns and
institutional behaviors.7
This report describes and analyzes the CDR as an institutional accountability metric. It begins
with a history of the CDR and then describes how the CDR framework currently operates. It then
presents information on historical and more recent CDR trends and discusses potential
explanations for why CDRs are no longer screening out many IHEs. Next, the report takes a
closer look at CDR distribution within and across institutional sectors and explores how two
novel measures that could possibly be incorporated into a CDR-style accountability metric align
with the CDR. These two measures are a student loan borrower rate (SBR), which measures the
rate at which enrolled students borrow to attend an IHE; and a student loan dollar default rate
(SLDDR), which measures the amount of student loan dollars owed by an IHE’s defaulted

1 For information on the HEA Title IV aid programs, see CRS Report R43351, The Higher Education Act (HEA): A
Primer.
2 U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data
System Data Explorer, “Number and percentage distribution of Title IV institutions, by control of institution, level of
institution, and region: United States and other U.S. jurisdictions, academic year 2021–22,” https://nces.ed.gov/ipeds/
Search?query=&query2=&resultType=all&page=1&sortBy=date_desc&overlayTableId=32461.
3 U.S. Department of Education, Office of Federal Student Aid, Student Aid Data Center, “Title IV Program Volume
Reports: Award Year Summary by School Type,” 2021-2022, https://studentaid.gov/sites/default/files/fsawg/
datacenter/library/SummarybySchoolType.xls. This total includes Title IV funds made available through the Direct
Loan, Pell Grant, Iraq/Afghanistan Service Grant, and TEACH Grant programs. It excludes Title IV funds made
available through the Federal Supplemental Educational Opportunity Grants and Federal Work-Study Programs.
4 For an overview of the various requirements IHEs must meet to participate in the Title IV programs, see CRS Report
R43159, Institutional Eligibility for Participation in Title IV Student Financial Aid Programs.
5 U.S. Department of Education, “Student Assistance General Provisions and Guaranteed Student Loan and PLUS
Programs,” 53 Federal Register 36216, September 16, 1988.
6 See, for example, H.R. 4508 (115th Congress).
7 See, for example, H.R. 4662 (116th Congress).
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borrowers three years after entering repayment in a given year compared to the amount of student
loans borrowed by all of an IHE’s student loan borrowers who entered repayment in that year.
The report concludes with a discussion of relevant policy considerations.
Appendix A to this report provides a series of tables that present information on the
characteristics of IHEs as measured according to the CDR, the CDR paired with the SBR, and the
CDR paired with the SLDDR. Appendix B provides details on the methodology CRS used to
examine the three above-described methodologies. Appendix C provides a list of selected
acronyms used in this report.
History of Cohort Default Rates
The use of student loan default rates as a means to evaluate institutional quality traces its genesis
to regulatory actions taken by the Department of Health, Education, and Welfare’s (HEW’s)
Office of Education (the precursor to the U.S. Department of Education) in 1975. In the 1980s
and 1990s, a more contemporary cohort default rate framework was established through a series
of legislative and regulatory actions, culminating with enactment of CDR provisions in the
Omnibus Budget Reconciliation Act of 1990 (OBRA 1990; P.L. 101-508). Since that time,
Congress has updated the framework on several occasion, including making adjustments to how
CDRs are calculated and enacting legislation to enable some IHEs that would otherwise be
subject to CDR sanctions to avoid them.
1975 HEW Regulatory Actions
The HEA was initially enacted in 1965 and authorized the Guaranteed Student Loan (GSL)
program. Under this program, private sector and state-based lenders made loans to borrowers
using private capital and those loans were guaranteed against loss in limited circumstances (e.g.,
borrower death or default). Loans were either guaranteed by state or nonprofit agencies or, in
states without a state or nonprofit agency, directly by the federal government.8
As early as the beginning of the 1970s, the incidence of default under the program became a
concern for policymakers. HEW estimated that segments of the program would see a default rate
equal to 18.5% in FY19759 and sustained future increases in the default rate10 absent policy
interventions.11 Some program participants stated these default rates were “intolerable.”12
Stakeholders pointed to several factors as potentially contributing to increasing default rates in
the GSL program overall. These included, for example, HEW difficulties with aspects of program
management and implementation, a lack of borrower understanding of the responsibilities

8 These two models of loan guarantee were collectively referred to as the GSL program; the federal guarantee model
alone was referred to as the Federally Insured Student Loan (FISL) program. Over time, the dual approach of having
state-based or federal guarantors was phased out. The state-based approach was retained and became the mechanism
for providing guarantees for GSLs (and eventually Federal Family Education Loan program loans) across the nation.
9 These estimates applied to the FISL portion of the program. At the time, data on default rates in the GSL program as a
whole were incomplete and, thus, were not reported. U.S. Congress, Senate Committee on Labor and Public Welfare,
Examination of the Guaranteed Student Loan Program, 1974, 93rd Cong., 2nd sess., September 18-19, 1974,
(Washington, DC: GPO, 1974), pp. 3-5 (hereinafter, “Examination of the Guaranteed Student Loan Program”).
10 Default rate appears to have been defined as the ratio of loan dollars that defaulted divided by the amount of loans
that entered repayment status.
11 Examination of the Guaranteed Student Loan Program, pp. 3-5.
12 Examination of the Guaranteed Student Loan Program, p. 144.
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associated with borrowing,13 and gaps in student aid administrative processes at IHEs, which led
to overborrowing in some cases.14
Some stakeholders saw a relationship between the type of institutions attended by GSL borrowers
and high default rates. Data indicated that proprietary (private, for-profit) IHEs and community
colleges tended to have higher default rates compared to other types of IHEs. Some stakeholders
believed this was a result of the types of students served by such institutions (e.g., student
populations who tended to be at higher risk of default),15 while others highlighted issues with the
educational quality of some IHEs that “defaulted on their obligation to train and instruct.”16
In 1975, to address the default issue in the program, HEW’s Office of Education promulgated
regulations that specified factors the Commissioner of Education (Commissioner) could use to
determine whether an IHE was eligible to participate in the GSL program. These factors included
a requirement that IHEs have a default rate of no more than 10%.17 Default rate was calculated by
dividing the total dollar amount of defaulted GSLs made to the IHE’s students that had entered
repayment by the total dollar amount of all GSLs to the IHE’s students that had entered
repayment, and multiplied by 100. For an IHE with a default rate exceeding 10% or that failed to
meet other specified conditions, the Commissioner could require it to take “reasonable and
appropriate measures to alleviate” the conditions for initial or continued participation in the
student aid programs.18 The IHE was given the opportunity to produce evidence that the
conditions did not have an adverse effect on the GSL program or to submit a plan on how it
proposed to improve on the conditions.19 The Commissioner could also impose limitations on an
IHE “reasonably intended to correct such conditions.”20 Under this framework, the Commissioner
had the burden to show that an IHE had failed to take reasonable steps to reduce default rates in
order to justify termination of the IHE’s Title IV participation.21
In response to the establishment of the conditions, some commentators believed that to avoid
possible sanctions, some IHEs might raise admission standards to reduce default rates. They
believed that such institutional actions might result in discrimination against minority and low-
income students. Others believed that the thresholds were too restrictive and that they may “hurt
many schools that are doing a good job.”22 In reply, the Office of Education stated that while it
did not encourage nor condone discrimination, it did have a responsibility to administer the GSL
program in a sound and prudent manner and noted that when an IHE met any of the conditions, it
was often the result of issues in the IHE’s GSL program administration. With respect to default
rates in particular, the Office of Education noted there was “a good deal of evidence” indicating
“a high correlation between default rates and the educational institution attended,” and that an

13 Examination of the Guaranteed Student Loan Program, pp. 6-9, 10, 114, and 127-128.
14 U.S. Government Accountability Office (GAO), Need for Improved Coordination of Federally Assisted Student Aid
Programs in Institutions of Higher Education, B-164031(1), August 2, 1972, pp. 12-19.
15 Examination of the Guaranteed Student Loan Program, p. 130.
16 Examination of the Guaranteed Student Loan Program, p. 83.
17 The other factors were a requirement that no more than 20% of an IHE’s students withdrew from it during any
academic year, no more than 60% of an IHE’s students received a GSL for any academic year, and the IHE’s financial
condition was sufficient to enable it to provide the educational services for which its students who obtained GSLs had
enrolled.
18 U.S. Department of Health, Education, and Welfare, “Federal, State, and Private Programs of Low-Interest Loans to
Students in Institutions,” 40 Federal Register 7596, February 20, 1975.
19 40 Federal Register 7591, February 20, 1975.
20 40 Federal Register 7591, February 20, 1975.
21 53 Federal Register 36217, September 16, 1988.
22 40 Federal Register 7591, February 20, 1975.
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IHE’s high default rate may be “symptomatic that there are problems at the institution which
adversely affect” the GSL program.23
1980s and 1990s Student Loan Default Issues
While Congress expressed concern over the high incidence of default in the GSL program as
early as the 1970s, its initial efforts to address the issue via statutory provisions began in earnest
in the 1980s. Congressional testimony from the General Accounting Office (now the Government
Accountability Office [GAO]) show that between 1983 and 1989, loan volume under the GSL
program rose 83% while defaults rose by 338%, and the share of program costs associated with
defaults rose from approximately 10% in 1980 to 36% in 1990.24
Stakeholders pointed to a number of issues as factors potentially leading to the rising incidence of
default and associated increased costs in the GSL program, some of which echoed concerns raised
about default rates in the 1970s. Some stakeholders speculated that changes in GSL borrower
eligibility requirements and the failure of federal grant aid such as Pell Grants to keep pace with
rising college costs resulted in a greater proportion of low-income students (who were more likely
to default) borrowing loans to finance their postsecondary education.25 Research findings
indicated that individuals who defaulted on their student loans tended to be individuals who did
not complete their postsecondary education.26 Some observers believed that strengthening
institutional operations, such as through improving educational support services and changing
administrative practices, could aid in lowering loan defaults.27
Concerns about institutional quality and practices (some of which were alleged to rise to the level
of fraud) were also raised. While these issues were noted across all institution types, some
observers identified proprietary IHEs as being particularly problematic and reported that default
rates were disproportionately concentrated at such schools.28 According to GAO, proprietary
IHEs accounted for 22% of all loans borrowed but 44% of all student loan defaults. Additionally,
the default rates of students who attended proprietary IHEs were much higher (39%) than default
rates of students who attended public and private nonprofit IHEs (e.g., 25% at public two-year
IHEs, the next highest default rate among sectors).29 While it was acknowledged that proprietary
IHEs tended to enroll higher concentrations of students who were more likely to default on their
loans (e.g., low-income students), some Members of Congress argued that at least some of these
proprietary IHEs “lacked strict program and enrollment criteria, as well as administrative
policies” and did not offer valuable training to their students.30

23 40 Federal Register 7591, February 20, 1975.
24 U.S. Congress, Senate Committee on Governmental Affairs, Permanent Subcommittee on Investigations, Abuses in
the Federal Student Aid Programs, 101st Cong., 2nd sess., February 20, 26, 1990, S.Hrg.101-659 (Washington, DC:
GPO, 1990), pp. 6-7.
25 U.S. Congress, House Committee on Education and Labor, Subcommittee on Postsecondary Education, Student Loan
Defaults—The Belmont Task Force Report, 100th Cong., 2nd sess., February 2, 1988, Serial No. 100-64 (Washington,
DC: GPO, 1988), p. 8, 10-11 (hereinafter, “Student Loan Defaults—The Belmont Task Force Report”).
26 Student Loan Defaults—The Belmont Task Force Report, p. 12.
27 Student Loan Defaults—The Belmont Task Force Report, p. 22.
28 U.S. Congress, Senate Committee on Governmental Affairs, Permanent Subcommittee on Investigations, Abuses in
Federal Student Aid Programs, 101st Cong., 2nd sess., February 20, 261990, S.Hrg.101-659 (Washington, DC: GPO,
1990), pp. 12, 21.
29 U.S. Government Accountability Office (GAO), Guaranteed Student Loans: Analysis of Student Default Rates at
7,800 Postsecondary Schools, GAO/HRD-89-63BR, July 5, 1989, pp. 15-16. GAO reported on the percentage of
borrowers who had a loan guaranteed in academic year 1983 and defaulted on those loans by September 30, 1987.
30 Student Loan Defaults—The Belmont Task Force Report, p. 24.
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Congressional and Departmental Action
To address the high rates of default, Congress and the U.S. Department of Education (ED) took a
series of steps to address multiple aspects of the student loan program, including borrower-based,
lender- and guaranty agency-based,31 and school-based policy interventions. For borrowers,
Congress expanded borrower deferment and forbearance options,32 extended the period of
delinquency after which loan default occurred, imposed stricter student loan borrowing limits,
required borrowers to pay reasonable collection costs on defaulted loans, and authorized new loan
repayment plans like a graduated repayment plan and an income-sensitive repayment plan. For
lenders and guaranty agencies (GAs), Congress, among other actions, established lender
disclosure requirements, imposed due diligence requirements in default aversion and collection
activities, and prohibited lenders and GAs from engaging in certain fraudulent or misleading
practices to induce individuals to borrow.33
Regarding school-based interventions, Congress prohibited IHEs from using commissioned
salespersons to promote the availability of the GSL program at the school.34 ED, however,
initiated the primary school-based intervention in 1989 through a student loan default initiative.
One of the stated aims of the initiative was to reduce defaults in the GSL program (hereinafter,
the Federal Family Education Loan [FFEL] program)35 “by strengthening administrative
sanctions available to the Secretary against postsecondary institutions with excessive default
rates.”36 To that end, ED promulgated regulations37 specifying that it could terminate an IHE’s
eligibility to participate in all of the HEA Title IV programs if the IHE’s fiscal year default rate
exceeded (1) 40% for any fiscal year after 1989 and had not been reduced by 5% from its
previous year’s default rate, or (2) 60% for FY1989, 55% for FY1990, 50% for FY1991, 45% for
FY1992, and 40% for any fiscal year after FY1992. Fiscal year default rate was newly defined as
the percentage of an IHE’s FFEL borrowers38 who entered repayment on those loans in a given

31 Under the GSL program, private sector and state-based lenders made loans to students with nonfederal capital, and
the federal government guaranteed lenders against loss due to borrower default. Lenders retained ownership of the
loans and performed loan servicing functions such as billing borrowers, collecting loan payments, and initiating
collections work on defaulted loans. State and nonprofit guaranty agencies received federal funds to play the lead role
in administering many aspects of the program related to the loan guarantee, including taking possession of defaulted
loans to continue collections work and reimbursing lenders when loans were placed in default.
32 See, for example, P.L. 99-498.
33 For more information, see CRS Report 91-246 EPW, Selected Amendments Enacted Since 1980 to Control Student
Loan Defaults (archived, available to congressional clients upon request).
34 For more information, see CRS Report 91-246 EPW, Selected Amendments Enacted Since 1980 to Control Student
Loan Defaults (archived, available to congressional clients upon request).
35 In 1988, the GSL program was renamed the Robert T. Stafford Student Loan program under P.L. 100-297. The
Higher Education Amendments of 1992 (P.L. 102-325) subsequently dually named the program the FFEL program and
the Robert T. Stafford Federal Student Loan program. Historically, the characteristics of the loan products offered
under each of these three programs were changed many times by amendments. Some consistent characteristics of these
programs included the ability of individuals to borrow loans without security or endorsement, the availability of an
interest subsidy to qualifying borrowers, and the option for borrowers to defer payment of the principal and interest on
their loans during specified periods, such as while enrolled in postsecondary education.
36 53 Federal Register 36216, September 16, 1988.
37 U.S. Department of Education, “Student Assistance General Provisions and Guaranteed Student Loan and PLUS
Programs,” 54 Federal Register 24114, June 5, 1989. These regulations included other provisions intended to address
student loan default rates, such as provisions requiring IHEs to conduct student loan entrance and exit counseling and
requiring lenders to inform borrowers of when their loans were sold and to whom payments were to be made.
38 Excluded from this calculation were borrowers of Supplemental Loans for Parents (the precursor to Parent PLUS
Loans).
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fiscal year and defaulted within a two-year period after entering repayment.39 An IHE subject to
termination of its Title IV eligibility could avoid the sanction by demonstrating that it had acted
diligently to implement a variety of specified default reduction measures.40 IHEs with high
default rates but not so high as to meet the thresholds that warranted Title IV termination (default
rates exceeding 20% but less than the previously mentioned threshold applicable to each year)
could be required to implement default reduction measures (a default management plan) to
address the major causes of default by the IHE’s students. These new regulations had the effect of
placing the burden of proof on an IHE to show that its excessive default rates were due to factors
beyond its control. This was a departure from the previous regulatory framework under which ED
had the burden to show that an IHE had failed to take reasonable steps to reduce default rates in
order to justify termination of the IHE’s Title IV participation.41
ED’s regulations were somewhat controversial. During the rulemaking process, some
stakeholders said it was “unfair” to require an IHE to show that its excessive default rates were
due to factors beyond its control,42 and many objected to excluding the composition of an IHE’s
student body as an acceptable explanation for a high default rate. In response, ED stated it
believed that placing the burden of proof on an IHE was appropriate as, in its view, a high default
rate gave “rise to a strong inference that its [administrative] capability is lacking,”43 especially
given the high default rate thresholds ED had set in regulations.
The Omnibus Budget Reconciliation Acts of 1989 and 1990
Less than one year after ED promulgated its default rate regulations, and in response to the rapid
rate of borrowing of Supplemental Loans for Students (SLS; a type of FFEL program loan and a
precursor to Unsubsidized Stafford Loans) and the potential defaults associated with those
loans,44 Congress and the President enacted a statutory default rate provision under the Omnibus
Budget Reconciliation Act of 1989 (OBRA 1989; P.L. 101-239). The provision prohibited
undergraduate students enrolled at IHEs with a cohort default rate (CDR) of 30% or greater in the
most recent fiscal year from borrowing SLS. CDR was defined in a similar manner as the fiscal
year default rate specified in regulations: the percentage of Subsidized Loan and SLS borrowers
who entered repayment in a given fiscal year (the cohort fiscal year [CFY]) and defaulted on
those loans within a two-year period after entering repayment. This measure of CDR came to be
known as a two-year cohort default rate.
Soon thereafter, in 1990, OBRA 1990 revised the CDR measures and made consequences
associated with them applicable to all types of loans made under the FFEL program. Specifically,
an IHE whose CDR was equal to or greater than specified thresholds for the three most recent

39 For IHEs with 29 or fewer borrowers who entered repayment in a given fiscal year, the default rate was calculated as
the average of the IHE’s fiscal year default rates for the three most recent fiscal years; 54 Federal Register 24117, June
5, 1989.
40 54 Federal Register 24114, June 5, 1989. Such default reduction measures included, for example, revising
admissions policies to ensure that enrolled students had a reasonable expectation of succeeding in their programs of
study, improving the availability and effectiveness of academic counseling and job placement programs, and attempting
to reduce withdrawal rates by improving curricula, facilities, materials, and other aspects of educational programs.
41 53 Federal Register 36217, September 16, 1988.
42 54 Federal Register 24123, June 5, 1989.
43 53 Federal Register 24123, June 5, 1989.
44 Congress reported that 97,000 SLS were made in 1985 and 717,000 SLS were made in 1989, a 639% increase. U.S.
Congress, House Committee on the Budget, Providing for Reconciliation Pursuant to Section 5 of the Concurrent
Resolution on the Budget for Fiscal Year 1990, report to accompany H.R. 3299, 101st Cong., 1st sess., September 20,
1989, H.Rept. 101-247, pp. 87-89.
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consecutive cohort fiscal years was ineligible to participate in the FFEL program. The CDR
threshold was 35% for CFY1991 and CFY1992 and 30% for each cohort fiscal year thereafter.
The act specified that an IHE could appeal its loss of eligibility if it could demonstrate that ED’s
calculation of its CDR was incorrect or there were “exceptional mitigating circumstances” that
would make loss of program eligibility inequitable. Historically Black Colleges and Universities
(HBCUs), tribally controlled community colleges (later referred to as tribally controlled colleges
or universities [TCCUs]), and Navajo Community College (later renamed Diné College) were
exempt from the CDR provisions until July 1, 1994.45
ED subsequently promulgated implementing regulations for the new CDR requirements.46 Among
other provisions, the regulations specified those exceptional mitigating circumstances that would
make an IHE’s loss of program eligibility due to it exceeding the CDR thresholds inequitable.
These included (1) the progress of the IHE in reducing its CDR,47 (2) whether the IHE was
“successfully serving students from disadvantaged backgrounds,”48 and (3) whether the IHE had
high student completion and placement rates while a percentage of the IHE’s students received
federal student loans.49
Subsequent CDR Amendments in the 1990s and early 2000s
Following the enactment of the OBRA 1990 CDR requirements and their implementing
regulations, a number of other statutory and regulatory changes were made to them, along with a
variety of other measures intended to continue to enhance the integrity of the Title IV aid
programs and reduce student loan defaults.50 Statutory and regulatory changes included the
following:
• lowering the CDR threshold to 25% for CFY1994 onward51;
• requiring ED to prioritize HEA Title IV program reviews of IHEs with high
CDRs52;
• extending the CDR requirements to the newly authorized Direct Loan program53;

45 While the legislative history does not reveal an apparent rationale for this exemption, GAO reported that subsequent
extensions of the exemption were made in light of “special challenges faced by HBCUs and Tribal Colleges.” U.S.
Congress, Senate Committee on Labor and Human Resources, Higher Education Act Amendments of 1998, report to
accompany S. 1882, 105th Cong., 2nd sess., May 4, 1998, S.Rept. 105-181 (Washington, DC: GPO, 1998), p. 50.
46 U.S. Department of Education, “Student Assistance General Provisions and Guaranteed Student Loan Programs,” 56
Federal Register 33332, July 19, 1991.
47 Application of this exceptional mitigating circumstance was limited to a single year.
48 An IHE was considered to meet this criterion if at least two-thirds of its at least half-time enrollment students were
from disadvantaged economic backgrounds, at least two-thirds of its full-time students completed the educational
program in which they were enrolled, and at least two-thirds of such students who completed their program obtained
employment in an occupation for which the IHE provided training or subsequently enrolled in a more advanced
educational program.
49 56 Federal Register 33332, July 19, 1991.
50 For example, the timing of when default was considered to have occurred was changed from 180 days of
nonpayment to 270 days of nonpayment; The Higher Education Amendments of 1998 (P.L. 105-244).
51 The Higher Education Amendments of 1992 (P.L. 102-325).
52 The Higher Education Amendments of 1992 (P.L. 102-325).
53 U.S. Department of Education, “Student Assistance General Provisions,” 60 Federal Register 49178, September 21,
1995.
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• extending, on multiple occasions, the timeframe for the CDR exemptions for
HBCUs and TCCUs, ultimately through June 30, 200454;
• creating incentives for IHEs to maintain low CDRs by exempting them from
specified loan program administrative requirements55;
• adding to and modifying the instances when IHEs would be considered to have
“exceptional mitigating circumstances”56;
• specifying that IHEs were ineligible to participate in the Pell Grant program due
to high CDRs57;
• changing the duration of when default was considered to have occurred from 180
days of nonpayment to 270 days of nonpayment58; and
• specifying that IHEs lost eligibility to participate in the FFEL and Direct Loan
programs if their CDRs were greater than 40% for a single cohort fiscal year.59
Higher Education Opportunity Act of 2008
The enactment of the myriad policies to curb student loan defaults in the late 1980s and
throughout the 1990s, including but not limited to CDR requirements, was followed by a
substantial decrease in cohort default rates and an initial increase in associated institutional
accountability actions. For example, the national CDR60 peaked with the CFY1993 CDR (22.4%)
and gradually decreased to a low with the CFY2003 CDR (4.5%), with some scholars suggesting
that this decrease was due, at least in part, to the implementation of the CDR requirements.61

54 P.L. 103-235 extended the exemption from July 1, 1994, to July 1, 1998. Leading up to this extension, GAO
estimated that absent an extension, 33 of the then 104 HBCUs could lose their Stafford Loan program (also referred to
as the FFEL program at the time) eligibility; U.S. Government Accountability Office (GAO), Default Rates at HBCUs,
GAO/HEHS-94-97R, March 9, 1994, pp. 3-4. The Higher Education Amendment of 1998 (P.L. 105-244) extended the
exemption from July 1, 1998, to July 1, 1999. After July 1, 1999, HBCUs and TCCUs remained exempt if they
engaged in certain activities to help ensure their CDRs fell below statutory thresholds by July 1, 2002. (Leading up to
this extension, GAO estimated that absent an extension, 22 of 98 HBCUs for which CDRs were then available could
lose their Title IV eligibility; GAO, Student Loans: Default Rates at Historically Black Colleges and Universities,
GAO/HEHS-97-33, January 21, 1997, p. 3.) The Consolidated Appropriations Act of 2001 (P.L. 106-554) extended the
exemption from July 1, 2002, to June 30, 2004. Leading up to this extension, a House Education and Workforce
Committee report recognized that HBCUs “play a vital role in providing access to postsecondary education for students
who might not otherwise enroll in higher education.” U.S. Congress, House Committee on Education and the
Workforce, Higher Education Technical Amendments of 2000, report to accompany H.R. 4505, 106th Cong., 2nd sess.,
June 12, 2000, H.Rept. 106-665, p. 14.
55 Higher Education Amendments of 1998 (P.L. 105-244); and U.S. Congress, Senate Committee on Labor and Human
Resources, Higher Education Act Amendments of 1998, report to accompany S.1882, 105th Cong., 2nd sess., May 4,
1998, S.Rept. 105-181 (Washington, DC: GPO, 2008), p. 30.
56 U.S. Department of Education, “Student Assistance General Provisions,” 60 Federal Register 61760, December 1,
1995; and Higher Education Amendments of 1998 (P.L. 105-244).
57 Higher Education Amendments of 1998 (P.L. 105-244).
58 Higher Education Amendments of 1998 (P.L. 105-244).
59 U.S. Department of Education, “Student Assistance General Provisions, Federal Family Education Loan Program,
William D. Ford Federal Direct Loan Program, and Federal Pell Grant Program,” 65 Federal Register 65632,
November 1, 2000.
60 The national CDR is a single CDR for all IHEs in a given cohort fiscal year.
61 See the “National CDR” section of this report. See also, for example, Rajeev Darolia, What Happens to Students
When the Federal Government Sanctions Colleges?, Third Way, October 22, 2019, p. 7, https://thirdway.imgix.net/
pdfs/override/What-Happens-to-Students-When-the-Fed-Gov-Sanctions-Colleges.pdf.
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Cohort Default Rates and HEA Title IV Eligibility: Background and Analysis

Additionally, the number of IHEs subject to sanctions due to high CDRs peaked with the
CFY1992 CDRs (1,028 IHEs), but quickly declined to near zero with the CFY1998 CDRs.62
Despite these gains, in 2003 ED’s Office of Inspector General (OIG) found that CDRs did not
provide decisionmakers with sufficient information on Title IV student loan defaults overall.63
Among other findings, OIG found that rates of default increased in the year immediately
following the two-year measurement period used in CDRs at the time. OIG also found that
borrowers in deferment or forbearance on their loans materially lowered IHEs’ CDRs, as
borrowers in these statuses are considered to be in repayment on their loans for CDR purposes.
Thus, these statuses could extend the period of time during which a borrower was not a risk of
default, potentially through the end of the two-year measurement period.64 OIG concluded that
without information that reflected general default trends, IHEs might continue to participate in the
Title IV programs even though a significant portion of their students may ultimately default on
their loans.
While some Members of Congress believed that CDRs were “one effective mechanism” to
protect the integrity of the federal student aid programs and were a “relatively reliable indicator
of the quality of programs and resulting successes of students in the job market,” they also found
that CDRs may not always provide an accurate depiction of student loan defaults. Thus, at least in
part due to OIG’s findings, these Members proposed updating the definition of CDR to be the
percentage of FFEL and Direct Loan program Subsidized Loan and Unsubsidized Loan
borrowers65 who entered repayment in a given fiscal year and defaulted on those loans within
three fiscal years of entering repayment (three-year cohort period).66 This definition of CDR
came to be known as the three-year CDR. It was reported that an unofficial analysis by ED found
that in using a three-year CDR, the overall CDR at proprietary IHEs would nearly double to
16.7%, the overall CDR for public IHEs would increase from 4.7% to 7.2%, and the overall CDR
at private nonprofit IHEs would increase from 3.0% to 4.7%.67 Opponents of these proposed
changes largely represented proprietary IHEs, and argued that the changes would unfairly
penalize proprietary IHEs for accepting large numbers of low-income students, who were more
likely to default on their loans. They further argued that research had shown little correlation
between default rates and institutional quality but rather reflected other factors such as student
socioeconomic status, academic success, and postgraduate income.68
While Congress and the President ultimately enacted a three-year CDR under the Higher
Education Opportunity Act of 2008 (HEOA; P.L. 110-315), the CDR threshold was upward

62 The CFY1992 CDRs resulted in ED imposing sanctions on IHEs in 1994. The CFY1998 CDRs resulted in ED
imposing sanctions on IHEs in 2000. U.S. Government Accountability Office (GAO), Federal Student Loans: Actions
Needed to Improve Oversight of Schools’ Default Rates, GAO-18-163, April 26, 2018, p. 46; and GAO, Federal
Student Loans: Actions Needed to Improve Oversight of Schools’ Default Rates, GAO-18-163, April 2018, p. 11,
https://www.gao.gov/assets/gao-18-163.pdf.
63 U.S. Department of Education, Office of Inspector General, Audit to Determine if Cohort Default Rates Provide
Sufficient Information on Defaults in the Title IV Loan Programs, ED-OIG/A03-C0017, December 22, 2003.
64 GAO made similar findings in 1999; see GAO, Student Loans: Default Rates Need to Be Computed More
Accurately, GAO/HEHS-99-135, July 28, 1999, https://www.gao.gov/assets/hehs-99-135.pdf.
65 The Higher Education Reconciliation Act of 2005 (P.L. 109-171) authorized PLUS Loans to graduate and
professional students beginning July 1, 2006.
66 See U.S. Congress, House Committee on Education and Labor, College Opportunity and Affordability Act of 2007,
report to accompany H.R. 4137, 110th Cong., 1st sess., December 19, 2007, H.Rept. 110-500, p. 261.
67 Kelly Field, “For-Profit Colleges Lobby Against Proposed Change in Calculating Student-Loan Default Rates,” The
Chronicle of Higher Education, January 30, 2008.
68 Kelly Field, “For-Profit Colleges Lobby Against Proposed Change in Calculating Student-Loan Default Rates,” The
Chronicle of Higher Education, January 30, 2008.
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adjusted from 25% to 30% to address concerns raised by the proposal’s opponents.69 To
implement these changes, the HEOA provided a three-year transition period during which the
two-year CDR methodology remained in effect until three consecutive years’ worth of CDRs
under the new three-year calculation were available. Thus, for the period of CFY2009 through
CFY2011, both a two-year and a three-year CDR were calculated, but IHEs were not subject to
sanctions pursuant to the three-year CDR until FY2014 (i.e., after the CFY2011 three-year CDR
was available).70
Recent Developments
In general, statutory and regulatory CDR provisions have not been directly amended since the
HEOA’s enactment and the promulgation of its implementing regulations. However, Congress
and ED have taken a variety of actions in recent years that enabled some IHEs that would have
otherwise been subject to loss of eligibility to participate in the Direct Loan and/or Pell Grant
program to continue their participation:
• In 2014, in response to concerns over split-loan servicing,71 ED adjusted CDR
calculations by excluding as defaulted those borrowers who defaulted on an applicable
student loan but had one or more other Direct or FFEL program loans in a repayment,
deferment, or forbearance status for at least 60 consecutive days and did not default
during the three-year measurement period. ED only adjusted CDRs in this way for IHEs
that would have otherwise been subject to the potential loss of Direct Loan and/or Pell
Grant program eligibility with the release of the CFY2011 CDRs.72 It is unclear how
many IHEs were affected by the adjustment. Reports indicate that some community
colleges and HBCUs had requested the relief from ED73 and that just prior to the
adjustment, 15 community colleges had two consecutive years of default rates above the
30% threshold.74
• In 2018, as part of the Bipartisan Budget Act of 2018 (P.L. 115-123), Congress
authorized ED to waive the application of certain CDR appeals requirements
during the period of February 9, 2018, to March 23, 2018, for a public IHE that
offered an associate’s degree, was located in an economically distressed county,75

69 Kelly Field, “House Bill Retains Controversial Default-Rate Plan but Adds Safeguards,” The Chronicle of Higher
Education, February 6, 2008. See also, Jacob P.K. Gross, Osman Cekic, and Don Hossler et al., “What Matters in
Student Loan Default: A Review of the Research Literature,” Journal of Student Financial Aid, vol. 39, no. 1 (2009),
pp. 19-29.
70 The HEOA also made foreign nursing schools eligible to participate in the FFEL program. In doing so, it specified
that such schools must reimburse ED for “the cost of any loan defaults for current and former students included” in
their CDR calculations during the previous fiscal year. This provision has never been implemented because no foreign
nursing school has ever participated in the Direct Loan program. This report will not further address CDRs at foreign
nursing schools.
71 Split-servicing occurs when a borrower’s HEA Title IV loans are serviced by more than one loan servicer.
72 U.S. Department of Education, Office of Federal Student Aid, “Adjustment of Calculation of Official Three-Year
Cohort Default Rates for Institutions Subject to Potential Loss of Eligibility,” electronic announcement, September 23,
2014, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2014-09-23/general-subject-
adjustment-calculation-official-three-year-cohort-default-rates-institutions-subject-potential-loss-eligibility.
73 Michael Stratford, “Reprieve on Default Rates,” Inside Higher Ed, September 4, 2014.
74 Paul Fain, “The Default Trap,” Inside Higher Ed, July 30, 2014.
75 Economically distressed county was defined as “a county that ranks in the lowest 5% of all counties in the United
States based on a national index of county economic status.”
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and would have otherwise lost eligibility to participate in the Pell Grant
program.76
• In 2018, as part of the Consolidated Appropriations Act, 2018 (P.L. 115-141),
Congress authorized ED to waive the application of certain CDR requirements
during FY2018 and FY2019 for (1) the above-specified IHE and (2) a public IHE
or a Tribal College or University (TCU) whose fall enrollment for the most
recently completed fiscal year comprised a majority of students who were Indian
or Alaska Native and that would have otherwise lost eligibility to participate in
the Pell Grant program.77
• In 2019, as part of the Further Consolidated Appropriations Act, 2020 (P.L. 116-
94), Congress authorized ED to waive the application of certain CDR appeals
requirements during FY2020 and FY2021 for a public IHE that offered an
associate’s degree, was located in an economically distressed county,78 was
impacted by Hurricane Matthew, and would have otherwise lost eligibility to
participate in the Direct Loan program.79
• In 2020, as part of the Consolidated Appropriations Act, 2021 (P.L. 116-260),
Congress authorized ED to waive the application of certain CDR appeals
requirements during FY2021 and FY2022 for a private nonprofit IHE that would
have otherwise lost eligibility to participate in the Pell Grant program and (1)
was an Alaska Native-Serving Institution and a Native American-Serving Non-
Tribal Institution whose fall enrollment for the most recently completed
academic year c0mprised a majority of students who were Indian or Alaska
Native and were eligible to receive the maximum Pell Grant award, and (2) with
a fall enrollment for the most recently completed academic year that comprised a
majority of students who were African American and at least 50% or more
received a Pell Grant.80
• In 2022, as part of the Consolidated Appropriations Act, 2022 (P.L. 117-103),
Congress authorized ED to waive the application of certain CDR appeals
requirements during FY2022 and FY2023 for a public IHE that offered an
associate’s degree, was located in an economically distressed county,81 was
impacted by Hurricane Matthew, and would have otherwise lost eligibility to
participate in the Direct Loan program.82

76 This waiver specifically applied to Southeast Kentucky Community and Technical College.
77 This waiver applied to Southeast Kentucky Community and Technical College and United Tribes Technical College
(a TCU), respectively.
78 Economically distressed county was defined as “a county with a poverty rate of at least 25% based on the U.S.
Census Bureau’s Small Area Income and Poverty Estimate program data for 2017.”
79 The waiver specifically applied to Denmark Technical College (an HBCU).
80 The waiver specifically applied to Alaska Christian College and Arkansas Baptist College (an HBCU), respectively.
81 Economically distressed county was defined as “a county with a poverty rate of at least 25% based on the U.S.
Census Bureau’s Small Area Income and Poverty Estimate program data for 2017.”
82 The waiver specifically applied to Denmark Technical College (an HBCU).
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Key Elements of Current CDR Design and
Procedures
Currently, the HEA and regulations specify a variety of Title IV institutional eligibility
requirements and consequences if an IHE’s CDR equals or exceeds certain thresholds.83 In short,
an IHE is subject to loss of eligibility to participate in the Direct Loan and Pell Grant programs if
its CDR is equal to or greater than 30% for each of its three most recent cohort fiscal years84 and
is subject to loss of eligibility to participate in the Direct Loan program if its CDR is equal to or
greater than 40% in its most recent cohort fiscal year.85 An IHE with a CDR equal to or greater
than 30% but less than 40% for a single cohort fiscal year must establish a default prevention task
force to prepare a default prevention plan.86 An IHE with a CDR equal to or greater than 30% but
less than 40% for two consecutive cohort fiscal years must update its default prevention plan87
and ED may make its certification88 to participate in the Title IV programs provisional.89
An IHE may request an adjustment to the data underlying its CDR or appeal the application of its
CDR to the IHE in a given year under circumstances specified in the HEA and regulations in
order to avoid potential sanctions. IHEs with lower CDRs (less than or equal to 15%, depending
on the circumstances) are eligible for some benefits that may relieve them from fulfilling
specified student loan administration requirements.90
CDR Formula
To calculate an IHE’s CDR, one of two formulas may be used, depending on the number of an
IHE’s borrowers who enter repayment on specified FFEL and Direct Loan program loans in a
given fiscal year. One formula is for IHEs with 30 or more borrowers who enter repayment in a
fiscal year, and the other formula is for IHEs with fewer than 30 borrowers who enter repayment
in a fiscal year.
Two key terms apply to both formulas:
• Cohort fiscal year (CFY): The fiscal year for which an IHE’s CDR is calculated
and referring to the fiscal year in which a borrower entered repayment on their
loan(s) for purposes of the CDR calculation.91
• Cohort default period: The three-year period that begins October 1 of the cohort
fiscal year in which a borrower enters repayment (regardless of the actual month

83 HEA Section 430(e) also specifies that ED must annually publish CDRs for FFEL program lenders, holders, and
guaranty agencies. Those CDRs are not discussed in this report.
84 HEA §§435(a)(2) and 401(j).
85 34 C.F.R. §668.206(a)(1).
86 A default prevention plan identifies factors causing an IHE’s CDR to exceed the threshold and establishes objectives
and steps an IHE will take to improve its CDR; HEA §435(a)(7).
87 HEA §435(a)(7).
88 Certification refers to ED’s determination that an IHE meets Title IV participation requirements; an IHE may not
participate in the Title IV programs until ED has certified it for participation. For additional information, see HEA
Section 498.
89 34 C.F.R. §668.16(m)(2).
90 Separate CDR requirements apply to the Perkins Loan program. Those requirements are not discussed in this report.
91 For example, when calculating the 2018 CDR, the cohort fiscal year is October 1, 2017-September 30, 2018. A
borrower must enter repayment on an applicable loan at any time in this period to be included in the 2018 CDR.
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and day on which the borrower enters repayment) on their applicable loan(s) and
ends on September 30 of the second succeeding fiscal year.92
For borrowers who have received a qualifying loan for attendance at more than one IHE, the
borrower is attributed to each IHE where they obtained a loan. It is possible for a borrower to be
included in more than one IHE’s CDR calculation in the cohort fiscal year.
IHEs with 30 or More Borrowers Entering Repayment in a Cohort Fiscal Year
For IHEs with 30 or more borrowers who enter repayment in a particular cohort fiscal year, the
formula to calculate their CDR can be expressed as follows93:
Specified FFEL and Direct Loan borrowers who entered repayment in a given cohort fiscal
year and who defaulted during the cohort default period
divided by
Specified FFEL and Direct Loan borrowers who entered repayment in a given cohort fiscal
year94
These results are then multiplied by 100 to determine an IHE’s CDR. This formula is known as
the non-average rate formula.95
IHEs with Fewer Than 30 Borrowers Entering Repayment in a Cohort Fiscal
Year
For IHEs with fewer than 30 borrowers who enter repayment in a particular cohort fiscal year, the
formula to calculate their CDR can be expressed as follows96:
Specified FFEL and Direct Loan borrowers who entered repayment in a given cohort fiscal
year or either of the two preceding fiscal years and who defaulted during the cohort default
period for the cohort fiscal year in which they entered repayment
divided by
Specified FFEL and Direct Loan borrowers who entered repayment in a given cohort fiscal
year or the two preceding fiscal years97
These results are then multiplied by 100 to determine the IHE’s CDR. This formula is known as
the average rate formula.

92 For example, a borrower who enters repayment on their loan in May 2018 would be included in the cohort default
period spanning October 1, 2017-September 31, 2020.
93 Of the 4,731 IHEs that had CDRs issued for CFY2019, 4,000 (about 85%) had their CDRs calculated according to
this formula; U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default Rate for Schools,
FY2019, https://fsapartners.ed.gov/sites/default/files/2022-09/PEPS300REPORT.xlsx.
94 HEA §435(m)(1)(A).
95 In practice. ED truncates the results of an IHE’s CDR calculation to the first decimal place.
96 Of the 4,731 IHEs that had CDRs issued for CFY2019, 731 (about 15%) had their CDRs calculated according to this
formula; U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default Rate for Schools,
FY2019, https://fsapartners.ed.gov/sites/default/files/2022-09/PEPS300REPORT.xlsx.
97 HEA §435(m)(1)(C).
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Formula Elements
Although the non-average rate and average rate formulas vary in terms of the group of borrowers
included in each,98 they share several common elements, including the types of borrowers
considered in each formula, the definition of default, and how borrowers are treated under the
formulas in special circumstances.
Types of Borrowers Included in the CDR Calculation
The CDR calculation includes all of an IHE’s current and former students who, during the cohort
fiscal year (and for purposes of the average rate calculation, the two preceding fiscal years)
entered repayment on an FFEL or Direct Loan program Subsidized Loan or Unsubsidized Loan
(hereinafter referred to collectively as Subsidized Loans and Unsubsidized Loans, unless
otherwise specified) borrowed to attend the IHE.99 All other loans types, including FFEL and
Direct Loan program PLUS Loans to parents of dependent undergraduate students and PLUS
Loans to graduate and professional students, as well as Perkins Loans, are excluded from the
calculation.100 TEACH Grants that were converted into an Unsubsidized Direct Loan are also
excluded.101
Borrowers of FFEL and Direct Loan program Consolidation Loans (hereinafter referred to
collectively as Consolidation Loans, unless otherwise specified) are included in the CDR
calculation if their Consolidation Loan was used to repay a Subsidized Loan or Unsubsidized
Loan (even if the Consolidation Loan also repaid some excluded loans) used to attend the IHE. A
borrower of a Consolidation Loan that was used solely to repay excluded loans is omitted from
the calculation altogether.102
Denominator
For the non-average rate formula, the denominator of an IHE’s CDR calculation includes the
number of borrowers of applicable loan types who entered repayment on their loans in the
CFY.103 For the average rate formula, the denominator of the CDR calculation includes the
number of borrowers of applicable loan types who entered repayment in the current CFY or the
two preceding fiscal years.104
For both formulas, borrowers are included in the denominator based on when their applicable
loans entered repayment, as determined under the requirements attached to the type of loan.105
Subsidized Loans and Unsubsidized Loans generally enter repayment the day after the six-month
grace period that begins when a borrower ceases to be enrolled on at least a half-time basis in an

98 The average rate formula accounts for an IHE with small numbers of borrowers entering repayment in a cohort fiscal
year by essentially pooling borrowers who entered repayment and borrowers who defaulted across multiple years.
99 For borrowers who have received a qualifying loan for attendance at more than one IHE, the borrower is attributed to
each IHE where they obtained a loan. It is possible for a borrower to be included in more than one IHE’s CDR
calculation in the same fiscal year. 34 C.F.R. §668.202(b)(2).
100 HEA §435(m)(1).
101 34 C.F.R. §668.202(b)(3).
102 34 C.F.R. §668.202(b)(3) and (c)(1)(i); and U.S. Department of Education, Cohort Default Rate Guide: September,
2020, p. 2.1-9 (hereinafter, “ED, CDR Guide”).
103 HEA §435(m)(1)(A).
104 HEA §435(m)(1)(C). For example, for CFY2020, the average rate CDR denominator would include borrowers who
entered repayment on their applicable loans in FY2018, FY2019, or FY2020.
105 34 C.F.R. §668.201(f).
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eligible educational program. For CDR purposes, Consolidation Loans used to repay Subsidized
Loans or Unsubsidized Loans are considered to have entered repayment on the date that the
underlying Subsidized Loans and Unsubsidized Loans entered (or would have entered)
repayment.106
Several special circumstances may affect whether a borrower is included in an IHE’s
denominator. For example, if a borrower’s loan is discharged due to school closure, false
certification, or identity theft, the borrower is excluded from the denominator regardless of
whether the discharge occurred prior to or after entry into repayment. On the other hand, if a
borrower’s loan is discharged due to bankruptcy, death, total and permanent disability, or other
types of loan discharge107 before they entered repayment on their loan or after they enter
repayment but before the end of the cohort default period and before they default, then the
borrower is included in the denominator for the cohort fiscal year based on the date the loan was
discharged.108
Numerator
For both the non-average rate formula and the average rate formula, a borrower is included in the
numerator of the CDR calculation if (1) they were included in the denominator and (2) they
defaulted on one or more of their applicable loans—or met other specified conditions (described
below)—in the cohort default period (i.e., in the fiscal year in which they entered repayment or in
either of the two succeeding fiscal years).109
Whether a loan is considered to be in default depends, in part, on the type of loan. All Direct Loan
program loans and those FFEL program loans held by ED110 are considered to be in default after
the borrower has failed to make payments, when due, for 360 days.111 FFEL program loans not
held by ED are considered to be in default only if a GA has paid a default claim to the lender that
holds the loan (after no more than 420 days of borrower delinquency).112

106 See, ED, CDR Guide, p. 2.1-11. This appears to hold true even in instances in which a borrower obtained a
Consolidation Loan during the grace period for the underlying loans. For non-CDR purposes, a Consolidation Loan
generally enters repayment on the date it is disbursed. 34 C.F.R. §§682.200 and 685.207(e).
107 For additional information on these on loan discharges, see CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
108 Several other special circumstances may affect whether a borrower is included in the denominator. These special
circumstances and their treatment under the CDR calculation are detailed in ED, CDR Guide, pp. 2.1-11 through 2.1-
14.
109 34 C.F.R. §668.202(c). For example, under the non-average rate formula for CFY2020, a borrower would be
included in the numerator if they (1) entered repayment in CFY2020 and (2) defaulted on one or more of their
applicable loans or met other specified conditions in FY2020, FY2021, or FY2022. Under the average rate formula for
CFY2020, a borrower would be included in the numerator if they (1) entered repayment in FY2018, FY2019, or
FY2020 and (2) defaulted on one or more of their loans or met other specified conditions in the cohort default period
for the fiscal year in which they entered repayment (e.g., borrowers who entered repayment in FY2020 and defaulted or
met other specified conditions in FY2020, FY2021, or FY2022).
110 A FFEL program loan may be held by ED in several circumstances, such as after it has been assigned to ED to
protect the federal fiscal interest or if it was sold to ED under temporary purchase authority graduated to the department
under the Ensuring Continued Access to Student Loans Act of 2008 (ECASLA; P.L. 110-227) and extended under P.L.
110-350. HEA §§428(c)(8) and 459A; 34 C.F.R. §682.409.
111 34 C.F.R. §668.202(c). All Direct Loan program loans are held by ED. FFEL program loans may be held by ED,
private lenders, or guaranty agencies.
112 A borrower is considered in default when they have failed to make payments when due on their loans for 270 days
for a loan repayable in monthly installments or for 330 days for loans repayable in less frequent installments. When a
borrower of an FFEL program loan not held by ED defaults, the loan holder (e.g., the original lender) files a default
(continued...)
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A borrower is not considered in default, and thus excluded from the numerator, if the loan that
defaulted was rehabilitated113 before the end of the cohort default period.114 On the other hand, a
borrower who consolidates out of default or pays their loan in full after defaulting before the end
of the cohort default period is considered to have defaulted for CDR purposes, and thus is
included in the numerator.115 In addition, a loan on which a payment was made by the IHE (or
any entity or individual affiliated with the IHE) in order to avoid borrower default is considered
in default, and thus the borrower is included in the numerator.116
CDR Procedures
Statute, regulations, and guidance specify procedures ED follows to notify IHEs of their CDRs
and for IHEs to request adjustments to their CDRs or otherwise appeal the application of their
CDRs to avoid potential sanctions.
Draft CDRs
A draft CDR is calculated by ED for an IHE to review before it issues an official CDR.117 ED
typically transmits draft CDRs, along with the data used to calculate them, to IHEs in February.118
ED calculates each IHE’s draft CDR using the non-average rate formula regardless of the number
of borrowers who entered repayment in the fiscal year.119
After receiving its draft CDR, an IHE may submit various challenges to it, based either on
incorrect data used in the calculation of the draft CDR or on a low rate of participation of its
enrolled students in the Direct Loan program (known as a participation rate index [PRI]
challenge).120 The former gives an IHE the opportunity to identify and correct any inaccuracies in
the underlying data that may ultimately be used to calculate its official CDR. The latter gives
IHEs the opportunity to challenge a potential loss of eligibility to participate in the Direct Loan

claim (or insurance claim) with a GA. The GA then pays the claim, which serves as a payment for the holder’s losses
stemming from the default, and the holder assigns the defaulted loan to the GA. The last day a lender may file a default
claim and remain within regulatory filing guidelines is the 360th day of delinquency for a loan with monthly
installments and the 420th day of delinquency for a loan with less frequent installments; 34 C.F.R. §§682.200(b) and
682.406; see also, Common Manual Governing Board, Common Manual: Unified Student Loan Policy 2022 Annual
Update, June 2022, ch. 13, p. 15, https://commonmanual.org/wp-content/uploads/2022/06/CM2022.pdf.
113 Rehabilitation offers borrowers who have defaulted an opportunity to have their loan(s) reinstated as active and to
have their borrower benefits and privileges restored. In general, to rehabilitate a loan, a borrower must, within a 10-
month period, voluntarily make nine reasonable and affordable monthly payments on their defaulted loan within 20
days of the due date; HEA §§428F(a) and 435(m)(2)(C); 34 C.F.R. §§682.405(a)(2) and 685.211(f).
114 In addition, an FFEL program loan is not considered in default if it was repurchased by a lender because the default
claim was submitted or paid in error; 34 C.F.R. §668.202(c)(2)(ii).
115 ED, CDR Guide, p. 2.1-12.
116 HEA §435(m)(2)(C). Several other special circumstances may affect whether a borrower is included in the
numerator. These special circumstances and their treatment under the CDR calculation are detailed in ED, CDR Guide,
pp. 2.1-11 through 2.1-14.
117 34 C.F.R. §668.201(e).
118 ED, CDR Guide, p. 2.2-2.
119 34 C.F.R. §668.204(a)(1).
120 HEA § 435(a)(8). In certain instances, an IHE may submit a PRI challenge before it receives its current-year draft
CDR. See ED, CDR Guide, p. 4.2-7.
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and/or Pell Grant programs or potential placement on provisional certification in the Title IV
programs121 upon the issuance of its official CDR.122
Official CDRs
The official CDR is the CDR on which an IHE’s eligibility to participate in the Title IV programs
is judged. Generally, ED transmits to IHEs and publicly releases official CDRs about six months
after the draft CDRs are transmitted to IHEs; official CDRs must be released no later than
September 30 of each year.123 As with the draft CDR, ED also transmits the data used to calculate
an IHE’s official CDRs to each school to enable it to identify and correct any inaccuracies.124 ED
calculates the official CDR using either the non-average rate or average rate formula, as
applicable. An official CDR cannot be calculated for an IHE with fewer than 30 borrowers
entering repayment in a cohort fiscal year if the IHE did not also have an official or unofficial125
CDR for either or both of the two previous fiscal years.126 Thus, such IHEs would not be subject
to CDR sanctions, nor would they be eligible for benefits.
IHEs may submit a number of requests for adjustments or appeals127 contending that some of the
data used to calculate the official CDR should be corrected due to the data being inaccurate, or
based on allegations that some of the defaulted loans included in an IHE’s CDR were improperly
serviced.128 If such an adjustment or appeal is successful, the IHE’s CDR may be lowered, raised,
or left alone.129 If an IHE’s CDR is lowered, it may avoid associated sanctions or become eligible
for certain administrative flexibilities.130
IHEs may also submit a variety of appeals contending that they have exceptional mitigating
circumstances for which they should not be subject to CDR sanctions.131 For example, an IHE
may submit an economically disadvantaged appeal, which alleges that it should not be subject to
potential loss of Title IV eligibility or potential placement on provisional certification in the Title
IV programs because it has a high number of low-income students and meets either specific

121 Under provisional certification, although ED certifies that an IHE has demonstrated it is capable of meeting Title IV
institutional participation standards within a specified timeframe and is able to meet its responsibilities under its
program participation agreement (PPA), the IHE must meet “any additional conditions specified in the institution’s
program participation agreement that the Secretary requires the institution to meet in order for the institution to
participate under provisional certification.” These additional conditions may include, for example, meeting additional
reporting requirements. 34 C.F.R. §668.13(c)(4)(ii).
122 For additional information on these challenges, see 34 C.F.R. §§668.204(b) and (c); and ED, CDR Guide, pp. 4.1-2
through 4.2-12.
123 ED, CDR Guide, p. 2.2-2.
124 34 C.F.R. §668.205(b).
125 A CDR is considered unofficial if an IHE does not have three consecutive years’ worth of CDR data to calculate the
average rate formula; U.S. Department of Education, Office of Federal Student Aid, “Official Cohort Default Rate
Search for Schools,” https://nsldsfap.ed.gov/cdr-searchable-database/school/search, accessed August 8, 2023.
126 Such an IHE would have an unofficial CDR calculated using the non-average rate formula and current year data.
ED, CDR Guide, p. 2.1-5.
127 In general, an IHE may submit more than one adjustment or appeal.
128 HEA §435(a)(4). An improper loan servicing appeal alleges that a defaulted loan borrower’s servicer failed to
perform one of several enumerated activities (e.g., failed to send at least one letter urging the borrower to make
payments on their loans); see 34 C.F.R. §668.212.
129 HEA §435(a)(2)(i). For additional information on these types of adjustments and appeals, see 34 C.F.R. §§668.209-
668.212; and ED, CDR Guide, pp. 4.3-2 through 4.6-15, and Appendix A Timeline.
130 ED, CDR Guide, p. 3.1-4.
131 HEA §§435(a)(2)(A)(ii)-(iii) and 435(a)(5). For additional information on these types of appeals, see 34 C.F.R.
§§668.213-668.216; and ED, CDR Guidance, pp. 4.7-2 through 4.10-3.
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placement or completion rates. Other appeals IHEs may submit include a PRI appeal (which is
calculated in the same manner and uses the same thresholds as the PRI challenge), an average
rates appeal, and a 30-or-fewer borrowers appeal.132 If an IHE is successful in one of these types
of appeals, it may avoid sanctions associated with its CDR; however, its CDR will not be
affected.133 Thus, the CDR in question may affect an IHE’s Title IV eligibility in future years.
An IHE’s loss of eligibility to participate in the Pell Grant and/or Direct Loan programs does not
take effect while its request for an adjustment or appeal is pending, although an IHE may choose
to suspend its participation in the Direct Loan program during the pendency of an adjustment or
appeal. If an IHE does not suspend its participation in the Direct Loan program during this time
but its request(s) for any adjustments or appeals is not successful in qualifying the IHE for
continued Title IV eligibility, the IHE is liable for certain costs associated with any Direct Loans
it originated and disbursed to its students more than 30 days after it received notice of its official
CDR.134
Enforcement
A CDR is calculated for each IHE that has a program participation agreement (PPA).135 An IHE
may have a single PPA covering the main campus and some or all of its branch campuses and
locations, or it may have separate PPAs covering the main campus and each branch campus and
location that meets Title IV requirements. Thus, an IHE’s CDR may represent borrower defaults
from one or multiple campuses associated with a single PPA; likewise, an IHE having multiple
entities with PPAs may have separate CDRs calculated for each entity associated with a unique
PPA.136 The CDR requirements apply to both foreign and domestic
IHEs that participate in the Title IV student aid programs.137
Corrective Actions and Sanctions for High CDRs
Under HEA Section 435 and accompanying regulations, an IHE may be subject to a range of
corrective actions and sanctions if its CDR equals or exceeds specified thresholds.138 If an IHE’s

132 In practice, before notifying IHEs of their official CDRs, ED automatically determines whether an IHE qualifies for
the average rates appeal or the 30-or-fewer borrowers appeal, as the data necessary for those appeals are generally
readily available to ED. ED then notifies an IHE that it is not subject to sanctions due to meeting the appeals’ criteria at
the same time it notifies the IHE of its official CDR. If an IHE disagrees with ED’s determination of whether it
qualifies for an average rates or 30-or-fewer borrowers appeal, it may submit such appeals to ED; see ED, CDR Guide,
pp. 4.9-3; 4.10-2 through 4.10-3.
133 ED, CDR Guide, p. 3.1-4.
134 Regulations specify that for any FFEL or Direct Loan program loans, ED is to estimate the “amount of interest,
special allowance, reinsurance, and any related or similar payments” ED makes or is obligated to make on those loans.
In general, the costs specified in the regulations only relate to FFEL program loans; thus, which Direct Loan program
costs an IHE may be liable for is unclear. Amounts of Direct Loans disbursed more than 45 days after an IHE submits
an appeal to ED are excluded from an IHE’s liability; 34 C.F.R. §668.206(e) and (f).
135 IHEs that participate in the Title IV student aid programs must have a current PPA. A PPA is a document in which
an IHE agrees to comply with the laws, regulations, and policies applicable to the Title IV programs.
136 Whether a PPA covers one or more campuses depends on how an IHE is organized, which is a determination made
by the IHE. For example, three institutional campuses may be covered by a single PPA, or three related campuses may
be covered under three individual PPAs. In the first scenario, the three campuses would have a collective CDR
calculated; in the second scenario, each individual campus would have a CDR calculated.
137 Foreign IHEs may only participate in the Direct Loan program; HEA §102(a)(1)(C).
138 In addition to the enforcement actions discussed herein, HEA Section 102(a)(2)(A)(iii)(IV) provides that foreign
nursing schools are to reimburse ED for the cost of any loan defaults for current and former students included in the
school’s CDR during the previous fiscal year. This provision has never been implemented because no foreign nursing
school has ever participated in the Direct Loan program.
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CDR is equal to or greater than 30% in a fiscal year, it must establish a default prevention task
force to identify the factors causing the IHE’s CDR to equal or exceed the threshold, establish
measurable objectives to improve the IHE’s CDR, and specify actions the IHE can take to
improve student loan repayment, including counseling about loan repayment. The resulting
document is called a default prevention plan, which an IHE must submit to ED for review and
technical assistance.139
If an IHE’s CDR is greater than or equal to 30% for two consecutive fiscal years, its certification
to participate in the HEA Title IV programs may become provisional (the IHE is not considered
administratively capable)140 and the IHE’s default prevention task force must review and revise its
default prevention plan and submit the revised plan to ED. ED may require the IHE to amend the
plan to include actions that ED determines will promote student loan repayment.141 Per
regulations, ED may determine that the IHE is unable to meet its financial responsibility or the
administrative obligations necessary to comply with the Title IV requirements if the fact that the
IHE’s two most recent CDRs exceed the thresholds is “likely to have a material adverse effect on
the financial condition of the institution.”142 If ED makes such a determination, the IHE may
continue to participate in the Title IV programs under alternative standards, under which the IHE
would be required to submit to ED an irrevocable letter of credit (LOC) or other financial
protection,143 and potentially meet other specified requirements.
If an IHE’s CDR is greater than or equal to 30% for three consecutive fiscal years, it loses its
eligibility to participate in the Direct Loan and Pell Grant programs for the remainder of the fiscal
year in which the determination is made and the two succeeding fiscal years.144
Per regulations, if an IHE’s CDR is greater than or equal to 40% in a single fiscal year, it loses its
eligibility to participate in the Direct Loan program for the remainder of the fiscal year in which
the determination is made and the two succeeding fiscal years.145
An IHE may not regain Title IV eligibility following loss due to a high CDR until the above-
described years of ineligibility have passed; the IHE has paid ED, or has entered into an
agreement to pay ED, for Direct Loan program liabilities accrued during the pendency of an
appeal; the IHE submits a new application to participate in the Title IV programs to ED and ED

139 34 C.F.R. Appendix A to Subpart N of Part 688 contains a sample default prevention plan.
140 34 C.F.R. §668.16(m)(2).
141 HEA §435(a)(7). See also 34 C.F.R. §668.217.
142 34 C.F.R. §668.171(d). The conditions enabling ED to make such determinations are referred to as discretionary
triggers and include institutional standards other than CDRs that ED may evaluate. In making this determination, ED is
to review the IHE’s efforts to remedy or mitigate the causes of the condition (e.g., the high CDRs) or to assess the
extent to which there are anomalous circumstances leading to the triggering event. The existence of two or more
discretionary triggers at an IHE is considered a mandatory trigger, for which ED will take immediate action without
evaluating whether their existence will have a material adverse effect on the IHE’s financial condition. U.S.
Department of Education, “Student Assistance General Provisions, Federal Family Education Loan Program, and
William D. Ford Federal Direct Loan Program,” 84 Federal Register 49788, 49868, September 23, 2019. Effective July
1, 2024, updated ED regulations would recategorize an IHE’s CDR being greater than or equal to 30% for two
consecutive fiscal years as a mandatory trigger rather than a discretionary trigger. U.S. Department of Education,
“Financial Responsibility, Administrative Capability, Certification Procedures, Ability to Benefit (ATB),” 88 Federal
Register 74704, October 31, 2023.
143 The precise amount of the LOC or financial protection may vary depending on circumstances. In general, public
IHEs would not be required to submit LOCs or financial protection to ED. See 34 C.F.R. §668.175(c) and (f).
144 HEA §435(a)(2).
145 34 C.F.R. §668.206(a)(1) and (g).
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determines that the IHE meets all Title IV participation requirements; and the IHE enters into a
new Title IV PPA with ED.146
IHEs with high CDRs that do not equal or exceed the specified thresholds may also be subject to
additional oversight. HEA Section 498A(a)(2) requires ED to prioritize program reviews of IHEs
with CDRs of greater than or equal to 25% or that place an IHE in the highest 25% of IHEs with
CDRs.147 In addition, ED policy specifies that while IHEs are typically certified to participate in
the Title IV programs for up to six years, IHEs with high CDRs but not so high as to equal or
exceed the 30% threshold may only be granted certification for two years.148
Changes in Status and Preventing Evasion of CDR Application
HEA Section 435(m)(3) requires ED to promulgate regulations designed to prevent IHEs from
evading the application of CDRs through a variety of tactics including branching, consolidation,
change of ownership or control, and other methods. To this end, ED regulations specify how an
IHE’s CDR is to be determined if it undergoes a change in status. For purposes of these
regulations, a change in status occurs when (1) an IHE acquires or merges with another Title IV
participating IHE, (2) an IHE acquires a branch campus or location from another Title IV
participating IHE, or (3) a branch campus or location of a Title IV participating IHE becomes a
separate new IHE.
Depending on the type of change in status, for the CDRs published just prior to the change, the
IHE undergoing the change may have another IHE’s CDR applied to it. For subsequent years, an
IHE undergoing a change in status would have its CDR calculated by including its applicable
borrowers and any other IHE party to the change in status.149
In some circumstances, if an IHE that is already subject to loss of Title IV eligibility as a result of
CDRs is a party to a transaction with a Title IV-eligible IHE that results in a change in status or
other specified outcomes,150 the Title IV-eligible IHE would newly be subject to loss of Title IV
eligibility. That IHE would have all of the same challenge, adjustment, and appeal options as the
IHE that was initially subject to loss of Title IV eligibility.151
Benefits for Low CDRs
The HEA specifies some benefits available to IHEs with low CDRs, which were enacted to
incentivize IHEs to maintain low CDRs by exempting them from specified Title IV
administrative requirements. An IHE whose most recent official CDR is less than 15% for each of

146 34 C.F.R. §668.206(g).
147 During a program review, ED evaluates an IHE’s compliance with the Title IV program requirements and identifies
actions the IHE must take to correct any problem(s). If during a program review ED determines that an IHE is unable to
meet its financial responsibility or administrative obligations necessary to comply with the Title IV requirements, ED
may take corrective actions or impose sanctions.
148 It is unclear what is considered to be a high CDR for these purposes; U.S. Government Accountability Office
(GAO), Federal Student Loans: Actions Needed to Improve Oversight of Schools’ Default Rates, GAO-18-163, April
26, 2018, p. 11, https://www.gao.gov/assets/gao-18-163.pdf.
149 34 C.F.R. §668.203. For additional information, see ED, CDR Guide, p. 2.5-5. It has been reported that in the
proprietary sector, some institutional parent companies with multiple IHEs each with their own PPA may use these
rules in their favor specifically to enable them to avoid potential CDR sanctions. See The Institute for College Access
and Success, Comments on Topics for Negotiated Rulemaking, Docket ED: ED-2015-OPE-0103, September 16, 2015,
pp. 15-17, https://ticas.org/wp-content/uploads/legacy-files/pub_files/ticas_dtr_neg_reg_comments.pdf.
150 These include, for example, a transfer of assets, a change in name, or a contract for services; 34 C.F.R.
§668.207(a)(1).
151 34 C.F.R. §§668.203 and 668.207.
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the three most recent fiscal years for which data are available may disburse Direct Loan program
loans for a semester, trimester, quarter, or four-month period in a single installment152 and is not
required to delay disbursement of a Direct Loan for 30 days for first-time, first-year
undergraduate borrowers.153 An IHE whose most recent official CDR is less than 5% and is a
home eligible institution154 that is originating a Direct Loan to cover a student’s cost of attendance
in a study abroad program may disburse loan proceeds in a single installment to the student,
regardless of the length of the student’s period of enrollment.155 Such an IHE is also not required
to delay disbursement of a Direct Loan for 30 days for any first-time, first-year undergraduate
borrowers who are studying abroad.156 While IHEs that are undergoing a change in ownership
that results in a change in control or a change in status are generally required to implement a
default management plan, such IHEs are exempt from this requirement if they do not have a CDR
greater than 10% or if the new owner does not own and has not owned another IHE that had a
CDR of greater than 10% during the owner’s tenure.157
Disclosure and Reporting Requirements
IHEs are not required to publicly disclose their CDRs. ED, however, is required to publish by
September 30 of each year a report showing default data for each institution for which a CDR is
calculated.158 The HEA also requires the Secretary of Education to publicly disclose on its
College Navigator website159 each IHE’s CDR.160
Application of CDRs: IHEs That Have Lost Eligibility to Participate
in HEA Title IV Programs Due to High CDRs
The CDR is the primary federal institutional accountability mechanism tied to the performance of
federal student loans. One of the assumptions underlying the CDR is that high a CDR may be an
indication of an IHE’s poor educational quality or poor administrative capability.161 This section
explores historical and current institutional performance under the CDR metric. Specifically, it

152 HEA §428G(a)(3) and (4). Typically, loans for these periods are required to be made in two or more disbursements.
153 HEA §428G(b)(1) and (3). Typically, IHEs must delay Direct Loan disbursements to first-time, first-year
undergraduate borrowers for 30 days following the beginning of the student’s course of study.
154 A home institution is the school at which a student is enrolled in a degree or certificate program. For study abroad
program purposes, students temporarily fulfill part of their program requirements at a foreign school.
155 A period of enrollment (or loan period) is the period for which a federal student loan is intended; 34 C.F.R.
§685.102(b).
156 HEA §428G(e).
157 HEA §487(a)(14)(C).
158 HEA §435(n)(4)(C). For additional information, see U.S. Department of Education, Office of Federal Student Aid,
“Official Cohort Default Rates for Schools,” https://fsapartners.ed.gov/knowledge-center/topics/default-management/
official-cohort-default-rates-schools.
159 Through the College Navigator website, ED makes publicly available a variety of consumer information about
IHEs; U.S. Department of Education, National Center for Education Statistics, “College Navigator,”
https://nces.ed.gov/collegenavigator/.
160 HEA §132(i)(1)(T). HEA Section 435(m)(4) requires ED to publish a report annually showing cohort default data
and life of cohort default rates for IHEs by sector (e.g., four-year public institutions, two-year proprietary institutions).
For purposes of this publication requirement, the data are to reflect the percentage of borrowers who borrowed
Subsidized Loans, Unsubsidized Loans, or PLUS Loans (or Consolidation Loans used to repay such loans) for
attendance at an institution who entered repayment in a given fiscal year and defaulted on those loans before the end of
each succeeding fiscal year.
161 Currently, HEA Title IV administrative capability requirements focus on an IHE’s processes, procedures, and
personnel used in administering Title IV funds and indicators of student success. HEA §498(d); 34 C.F.R. §668.16.
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explores the national CDR for CFY1987-CFY2020 and institutional CDRs for CFY2015-
CFY2017. While institutional CDRs for CFY2018, CFY2019, and CFY2020 are available, they
are generally excluded in the analysis presented in this section because they reflect years in which
the COVID-19 student loan payment pause was in effect, which made it significantly less likely
for most borrowers to default on their student loans. As such, those years’ CDRs are lower than
they might otherwise have been in the absence of that policy and may not provide sufficient
insight into institutional performance under the CDR metric in more typical circumstances.
National CDR
Each year, ED calculates the national CDR, which is a single CDR for all IHEs in a given cohort
fiscal year. Figure 1 presents the national CDR for CFY1987 through CFY2020. For CFY1987-
CFY2011, it presents the two-year CDR.162 For CFY2009-CFY2020, it presents the three-year
CDR.163 Figure 1 shows that nationally, two-year CDRs peaked in CFY1990 at 22.4%, and after
that declined fairly consistently until reaching a then-low of 4.5% in CFY2003.164 In the final
years of use, two-year CDRs increased somewhat before being replaced with three-year CDRs.
Under the three-year CDR measure, the national CDR peaked relatively early (14.7% in FY2010)
and has slowly decreased since then to 9.7% in CFY2017. The CFY2018, CFY2019, and
CFY2020 CDRs reflect years in which the COVID-19 student loan payment pause was in effect;
thus, those years’ CDRs are lower than they might otherwise have been in the absence of that
policy.

162 ED sanctioned IHEs for having three consecutive years’ worth of two-year CDRs that exceeded the applicable
threshold through CFY2010. Requirements for IHEs to meet specified CDR metrics were not in place for CFY1987-
CFY1988. For CFY1989-CFY1993, various CDR thresholds were used to determine institutional Title IV program
eligibility. For CFY1994-CFY2010, statute specified that an IHE could lose Title IV eligibility if its CDR equaled or
exceeded 25% in three consecutive fiscal years. That is, if an IHE’s CDR equaled or exceeded 25% for CFY2008,
CFY2009, and CFY2010 or any three consecutive cohort fiscal years thereafter, the IHE could lose Title IV eligibility.
163 ED calculated three-year CDRs for CFY2009 and CFY2010, but IHEs were not subject to CDR sanctions based on
those calculations until CFY2011. For CFY2011 to the present, statute specifies that an IHE may lose Title IV
eligibility if its CDR equals or exceeds 30% in three consecutive fiscal years. That is, if an IHE’s CDR equaled or
exceeded 30% for CFY2009, CFY2010, and CFY20111 or any three consecutive cohort fiscal years thereafter, the IHE
may lose Title IV eligibility.
164 ED has suggested a number of potential reasons for the decrease in the national CDR from CFY1990 to CFY2003,
including (1) the loss of Title IV eligibility and subsequent closure of many IHEs with chronically high CDRs in the
early 1990s, (2) ED’s efforts to provide IHEs with default prevention training, (3) enactment of legislation in 1998 that
increased the length of time for a loan to default, and (4) an increase in borrowers consolidating their loans while in
school (an option that was eliminated in 2006). U.S. Government Accountability Office (GAO), Federal Student
Loans: Actions Needed to Improve Oversight of Schools’ Default Rates, GAO-18-163, April 26, 2018, p. 11,
https://www.gao.gov/assets/gao-18-163.pdf.
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Figure 1. National Cohort Default Rates
CFY1987-CFY2020

Source: U.S. Department of Education, FY2024 Congressional Budget Justification, “Student Loans Overview,”
p. 34; and U.S. Department of Education, Office of Federal Student Aid, “National Default Rate Briefing for
FY2020 Official Cohort Default Rules,” electronic announcement (LOANS-23-10), September 29, 2023.
Notes: The two-year CDR was used to determine institutional Title IV eligibility for CFY1989-CFY2010; for
CFY2011-CFY2020, the three-year CDR was used to determine institutional Title IV eligibility.
Recent Institutional CDRs
Of the 5,278 domestic IHEs that participated in the HEA Title IV programs in academic year
(AY) 2020-2021,165 4,397 had official CDRs issued for CFY2017166 and 881 IHEs did not, either
because (1) they had fewer than 30 borrowers entering repayment in CFY2017167 and did not also

165 IHEs participating in the Title IV programs in AY2020-2021 (July 1, 2020-June 30, 2021) comprise the universe of
IHEs most closely aligned with the time the CFY2017 CDRs were issued (September 2020). This figure excludes IHEs
that newly became eligible to participate in the Title IV programs during the data collection year and those that stopped
participating in the Title IV programs during the data collection year. U.S. Department of Education, National Center
for Education Statistics, Integrated Postsecondary Education Data System.
166 For CFY2017, 344 foreign IHEs were issued CDRs. Foreign IHEs were excluded from this analysis because they do
not report to the National Center for Education Statistics’ Integrated Postsecondary Education Data System, which was
used to aggregate data for this analysis. U.S. Department of Education, Office of Federal Student Aid, Official Cohort
Default Rate for Schools, press package for FY2017, https://fsapartners.ed.gov/sites/default/files/2021-09/
FY2017PressPackage.xlsx.
167 While institutional CDRs for CFY2018, CFY2019, and CFY2020 are available, they are excluded from this analysis
(continued...)
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have an official or unofficial CDR for either or both of the two previous fiscal years (125 IHEs)168
or (2) they did not have data necessary to calculate a CDR for the given cohort fiscal year (756
IHEs).169 These latter IHEs, therefore, were not subject to sanctions for high CDRs and did not
receive benefits for low CDRs (e.g., exemption from specified Title IV administrative
requirements). As such, it is estimated that approximately 16% of domestic IHEs participating in
the Title IV programs in AY2020-2021 were not subject to CDR requirements at that time. Those
IHEs that were not subject to CDR requirements accounted for approximately 3% of total student
enrollment at domestic Title IV participating IHEs in AY2020-2021.170 Thus, while a sizeable
share of Title IV participating IHEs may not be subject to CDR requirements in a given year, the
CDR metrics capture IHEs enrolling the majority of postsecondary students.
IHEs Subject to CDR Sanctions and Appeal Outcomes
Early in the use of CDRs as an institutional accountability metric, high numbers of IHEs were
subject to CDR sanctions. Over time, this number has fallen substantially. For example, GAO
reported that from 1992 to 1999, 1,846 IHEs were subject to immediate loss of eligibility,
suspension, or termination from the Title IV programs due to high CDRs. From 2000 to 2008,
four IHEs were subject to such sanctions.171 The latter trend continues in more recent periods.
Table 1 depicts the number of IHEs that had official CDRs calculated in CFY2015, CFY2016, or
CFY2017, and of those, the number of IHEs (1) with their most recent CDR equaling 40% or
greater in a single cohort fiscal year, (2) with three consecutive years’ worth of CDRs equaling
30% or greater, (3) subject to CDR sanctions172 due to meeting the aforementioned thresholds,
and (4) ultimately referred for Title IV sanctions (i.e., loss of Direct Loan and/or Pell Grant
program eligibility).173 The table illustrates that, all told, a small portion (about 0.04%) of IHEs
with official CDRs were subject to Title IV sanctions in any given year examined.174 This appears
to be largely driven by the fact that few IHEs (0.30%-0.60%) met one of the aforementioned
CDR thresholds. For those IHEs that did meet one of the thresholds, a relatively small percentage

because they reflect years in which the COVID-19 student loan payment pause was in effect, which made it
significantly less likely for most borrowers to default on their student loans. As such, those years’ CDRs are lower than
they might otherwise have been in the absence of that policy and may not provide sufficient insight into institutional
performance under the CDR metric in more typical circumstances.
168 Special tabulation of data provided to CRS by the U.S. Department of Education, July 13, 2022. Such an IHE would
have an unofficial CDR calculated using the non-average rate and current-year data; ED, CDR Guide, p. 2.1-5.
169 The latter may occur, for example, if an IHE does not or has not participated in the Title IV student loan programs.
170 Calculations by CRS using U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System.
171 U.S. Government Accountability Office (GAO), Proprietary Schools: Stronger Department of Education Oversight
Needed to Help Ensure Only Eligible Students Receive Federal Student Aid, GAO-09-600, August 2009, p. 11,
https://www.gao.gov/assets/gao-09-600.pdf.
172 An IHE is subject to sanctions when it meets one of the above-described thresholds and ED does not
administratively determine that it meets criteria for an average rate appeal or a 30-or-fewer borrowers appeal.
173 An IHE is referred for sanctions if it does not successfully appeal the application of any potential sanctions to it or
the data underlying the CDR are not adjusted to bring the IHE’s CDR(s) within the threshold. In some instances,
although ED may determine that an IHE should be sanctioned for failure to meet CDR requirements, the IHE may close
or voluntarily withdraw from participating in the Title IV programs before the ED sanction is effectuated.
174 GAO previously issued a report that presented data on IHEs subject to CDR sanctions and appeals outcomes. The
data in that report differ from those presented here, as GAO presented data based on the fiscal year in which IHEs were
subject to a sanction (i.e., the year in which official CDRs were released), whereas the data presented in this report are
based on the cohort fiscal year for which the CDR measure was calculated. See U.S. Government Accountability Office
(GAO), Federal Student Loans: Actions Needed to Improve Oversight of Schools’ Default Rates, GAO-18-163, April
26, 2018, p. 30, https://www.gao.gov/assets/gao-18-163.pdf.
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(7%-10%) were ultimately referred for Title IV sanctions due to the availability of a number of
adjustments and appeals.175
Table 1. IHEs Subject to CDR Sanctions and Those Referred for Sanctions
CFY2015, CFY2016, and CFY2017

IHEs Meeting or Exceeding CDR Thresholds

Official CDR ≥
Official CDR
40% and
IHEs
≥ 30% for
Official CDR ≥
IHEs
IHEs
with
Official
Three
30% for Three
Subject
Referred
Official
CDR ≥
Consecutive
Consecutive
Unique
to CDR
for
CFY
CDRs
40%
CFYs
CFYs
IHEs
Sanctions
Sanctions
CFY2015
4,873
9
13
3
19
12
2
CFY2016
4,811
19
17
7
29
14
2
CFY2017
4,796
19
23
13
29
12
2
Source: U.S. Department of Education, Official Cohort Default Rates for Schools, press packages for FY2017,
FY2016, and FY2015; and special tabulation of data provided to CRS by the U.S. Department of Education, July
13, 2022.
Possible Explanations for Why CDRs Are No Longer Screening Out
Many IHEs
In addition to explicit rules for calculating CDRs, a variety of other factors might help explain
why CDRs are no longer screening out as many IHEs from Title IV participation compared to
previous years. These factors relate to how IHEs have responded to the existence of the CDR and
student loan repayment flexibilities provided to borrowers to help address difficulties they may
face in repaying their loans.
Institutional Responses to the CDR
The CDR was initially devised as an institutional accountability metric intended to address high
incidence of default in the federal student loan programs. At the time of its creation and
throughout its history, one assumption underlying the CDR was that if an IHE was of sufficient
quality, it would provide students with the skills to enable them to stay out of default on their
loans. To that end, many poorly performing (i.e., high borrower default) IHEs were eliminated
from HEA Title IV participation early on in the CDR’s usage.176 It is possible that as a result of
this culling, high numbers of poorly performing institutions were removed and are no longer in
operation and/or no longer participate in the HEA Title IV programs.
The CDR may also be performing a preventative role in that it may be encouraging IHEs to avoid
unwanted behavior in the first place. The fact that few IHEs have faced sanctions in recent years
could be viewed as evidence of the CDR’s effectiveness in this respect, assuming that in the
metric’s absence some IHEs might have higher default rates.

175 In more recent years, Congress has taken action to waive the application of specific appeals requirements to enable
some IHEs that would have otherwise been sanctioned due to high CDRs. See Appendix B.
176 U.S. Government Accountability Office (GAO), Proprietary Schools: Stronger Department of Education Oversight
Needed to Help Ensure Only Eligible Students Receive Federal Student Aid, GAO-09-600, August 2009, p. 11,
https://www.gao.gov/assets/gao-09-600.pdf.
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Relatedly, IHEs may have become more adept at navigating CDR requirements and may have
adopted practices to help ensure their compliance with the CDR. Some of these practices may be
viewed as positive for borrowers, while others may be viewed as negative. For example,
borrower-positive strategies have included creating programs to educate borrowers about student
loans and to improve financial literacy, updating student aid packaging practices to minimize
student loan borrowing, and providing more robust student support services to help increase
student retention and thus decrease the potential for default.177 On the other hand, some
stakeholders178 have alleged, and at least one government report has found, that some IHEs
engage in practices to encourage borrowers to use forbearance options specifically to aid the IHEs
in meeting their CDR requirements, regardless of whether forbearance is the most beneficial
option to the borrower179 (see the “Deferment and Forbearance” section).
Student Loan Repayment Flexibilities
Although the CDR framework has evolved over the years to address some issues or changes in
the federal student aid landscape, it has not evolved to account for other developments, most
notably the expansion of student loan repayment flexibilities that may help address difficulties
borrowers might face in repaying their loans and aid them in avoiding default.
Income-Driven Repayment Plans
Since the inception of the HEA student loan programs, borrowers have had the opportunity to
repay their loans according to a standard repayment plan under which they make fixed monthly
payments for a maximum of 10 years. Congress and ED have occasionally authorized or created
additional loan repayment plan options, often in response to perceived issues borrowers were
facing in repaying their student loans. For example, in the late 1980s as part of a series of steps to
address the high incidents of default, HEA amendments authorized borrowers to make payments
according to a graduated repayment plan or an income-sensitive repayment plan. Each of these
plans enabled borrowers to potentially make at least some payments in amounts lower than what
they would have made under a standard repayment plan with a maximum 10-year repayment
term.
Today, federal student loan borrowers may choose from among numerous loan repayment plans,
including several income-driven repayment (IDR) plans.180 Under these plans, borrowers make
monthly payments in amounts that are capped at a specified share (e.g., 5%, 10%, 15%, or 20%

177 Erin Dillon and Robin V. Smiles, Lowering Student Loan Default Rates: What One Consortium of Historically
Black Institutions Did to Succeed, Education Sector, February 2010.
178 See, for example, Pauline Abernathy, Lauren Asher, and Diane Cheng et al., Aligning the Means and the Ends: How
to Improve Federal Student Aid and Increase College Access and Success, The Institute for College Access and
Success, February 2013, pp. 23-24.
179 U.S. Government Accountability Office (GAO), Federal Student Loans: Actions Needed to Improve Oversight of
Schools’ Default Rates, GAO-18-163, April 26, 2018, pp. 14-26.
180 The IDR plans that are currently available to borrowers are the Income-Contingent Repayment (ICR) plan, the
Income-Based Repayment (IBR) plan (one version of which is available to individuals who qualify as a new borrower
on or after July 1, 2014, and another that is available to individuals who do not qualify as a new borrower as of that
date), the Pay As You Earn (PAYE) repayment plan, and the Revised Pay As You Earn (REPAYE) repayment plan. On
July 10, 2023, ED published a Final Rule that amends REPAYE plan provisions and refers to the updated plan as the
Saving on a Valuable Education (SAVE) plan. Some elements of the SAVE plan were effective July 30, 2023, while
others are to be effective July 1, 2024. In addition, effective July 1, 2024, new enrollment in the PAYE plan would be
prohibited; new enrollment the IBR plan would be limited to borrowers who have a partial financial hardship and have
not made more than 60 qualifying payments on the SAVE plan after July 1, 2024; and new enrollment in the ICR plan
would be limited to borrowers of Direct Consolidation Loans made on or after July 1, 2006, that repaid a Parent PLUS
Loan.
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depending on the plan) of their discretionary income,181 and it is possible for a borrower’s
monthly payment to equal $0.182After making payments for a specified period of time (e.g., 10,
20, or 25 years, depending on the plan), a borrower’s remaining loan balance is forgiven. One
type of IDR plan, the Income-Contingent Repayment plan, has been available to borrowers since
1994, but beginning in 2007 several other more generous types of IDR plans have been made
available via congressional and administrative action. Most recently, ED published a Final Rule
that amends one type of IDR plan, the Revised Pay As You Earn (REPAYE) repayment plan. (The
Final Rule also refers to the amended plan as the Saving on a Valuable Education [SAVE] plan.)
The changes are intended to, among other purposes, help “more borrowers avert delinquency and
default”183 by lowering all qualifying borrowers’ monthly payments and decreasing the maximum
repayment period required for loan forgiveness in some cases. The amended regulations would
also automatically enroll certain borrowers in an IDR plan after 75 days of nonpayment on their
loan(s).
In recent years, borrower enrollment in these plans has grown markedly. For example, about 10%
of Direct Loan program recipients were enrolled in an IDR plan as of June 30, 2013, compared to
32% of such recipients as of June 30, 2023.184
Research conducted by CBO indicates that borrowers enrolled in an IDR plan default on their
loans at lower rates than borrowers enrolled in other repayment plans.185 Additionally, ED’s
recent regulatory changes may make it less likely for some borrowers to default on their loans.186
For example, under the changes, some borrowers may be placed into an IDR plan after 75 days of
nonpayment, well before the 360 days of nonpayment after which a borrower is considered in
default on their loans. Thus, as borrower enrollment in IDR plans increases, institutional CDRs
may be likely to decrease.
While at least one type of IDR plan has been available to borrowers since the early use of CDRs
as an institutional accountability metric, the recent expansion of and increased borrower take-up
of IDR plans may have a bearing on whether the CDR is viewed as a sufficient institutional
accountability metric moving forward. Some stakeholders have pointed out that enrollment in an
IDR plan is considered a “good outcome” under the CDR metrics, in that borrowers have not
defaulted on their loans, even if the borrowers might otherwise struggle to pay down their loans
(e.g., based on their monthly income, they make low monthly payments, sometimes equal to

181 Discretionary income is defined as the portion of a borrower’s adjusted gross income that is in excess of a specified
multiple of the federal poverty guidelines applicable to the borrower’s family size.
182 For additional information on IDR plans, see CRS Report R45931, Federal Student Loans Made Through the
William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
183 U.S. Department of Education, “Improving Income Driven Repayment for the William D. Ford Federal Direct Loan
Program and the Federal Family Education Loan (FFEL) Program,” 88 Federal Register 43820, July 10, 2023.
184 In general, all of a borrower’s Direct Loan program loans must be repaid together according to the same repayment
plan. However, if a borrower seeking to repay according to one of the IDR plans has some types of loans that may be
repaid according to an IDR plan and others that may not, the borrower may repay the eligible loans according to an
IDR plan and the ineligible loans according to a non-IDR plan; 34 C.F.R. §685.208(a)(4). ED data do not provide
unduplicated headcounts of borrowers by repayment plan; thus, some borrowers may be counted more than once in this
calculation; CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Student Aid Data Center,
“Portfolio by Repayment Plan (DL, ED-Held FFEL, ED-Owned),” https://studentaid.gov/data-center/student/portfolio.
185 See, for example, Congressional Budget Office (CBO), Income-Driven Repayment Plans for Student Loans:
Budgetary Costs and Policy Options, February 2020, https://www.cbo.gov/publication/56277#_idTextAnchor025.
186 For additional discussion of how ED’s recent regulatory changes may affect CDRs, see U.S. Department of
Education, “Improving Income Driven Repayment for the William D. Ford Federal Direct Loan Program and the
Federal Family Education Loan (FFEL) Program,” 88 Federal Register 43862, 43876, July 10, 2023.
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$0).187 That said, if the intent of the CDR is to gauge institutional quality based on borrowers’
ability to repay their loans, the increasingly prevalent use of IDR plans may lessen the measure’s
effectiveness.188
Deferment and Forbearance
Deferment and forbearance provide borrowers with temporary relief from the obligation to make
monthly payments that would otherwise be due on their loans, and they have been available in
some form to borrowers throughout the federal student loan programs’ history.189 Currently,
deferment or forbearance may be available to borrowers in a variety of circumstances such as
while a borrower is experiencing economic hardship or temporary hardship, is unemployed or
employed less than full-time while seeking full-time employment, or is engaged in specified types
of service (e.g., AmeriCorps, military). Unless an interest subsidy applies to a borrower’s loans,190
interest continues to accrue during periods of deferment and forbearance; thus, during these
periods, a borrower’s loan balance may increase.
Borrowers in deferment or forbearance are considered current on their loans for purposes of
calculating an IHE’s CDR. That is, borrowers in deferment or forbearance at the time an IHE’s
CDR is calculated would be included in the denominator of the CDR but not the numerator. Even
if a borrower is not in deferment or forbearance at the time an IHE’s CDR is calculated, a
borrower’s use of these options prior to the calculation date may push a subsequent default
outside of the cohort default period. These uses of deferment or forbearance would result in a
decrease in an IHE’s CDR for a given cohort fiscal year.
As with IDR plans, the availability of deferment and forbearance options to borrowers may dilute
the utility of the CDR as an institutional accountability metric. As previously described, in 2003
when a two-year cohort default period was still in use, ED’s OIG asserted that CDRs did not
provide decisionmakers with sufficient information on Title IV student loan defaults. Among
other findings, OIG found that borrowers in deferment or forbearance materially lowered IHEs’
CDRs, but rates of default increased in the year immediately following the two-year cohort
default period.191 These findings indicated that while borrowers were able to remain out of default
for a short period of time after entering repayment, they had less success in staying out of default
in the longer term. HEA amendments subsequently updated the two-year cohort default period to
a three-year cohort default period, which would presumably weaken the effects of deferment and
forbearance on CDRs, as the three-year timeframe would capture a longer period of borrower
repayment activity.

187 See, for example, Michael Itzkowitz, Why the Cohort Default Rate is Insufficient, Third Way, November 7, 2017,
https://www.thirdway.org/report/why-the-cohort-default-rate-is-insufficient.
188 Owen Daugherty, Your Thoughts: Cohort Default Rates Don't Tell the Whole Story, National Association of Student
Financial Aid Administrators, December 19, 2020, https://www.nasfaa.org/news-item/23635/
Your_Thoughts_Cohort_Default_Rates_Don_t_Tell_the_Whole_Story.
189 For additional information on deferment and forbearance, see CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
190 Typically, an interest subsidy applies to a borrower’s Subsidized Loans (or the portion of a borrower’s
Consolidation Loan used to repay a Subsidized Loan) during periods of deferment. In addition, for a period of up to 60
months, an interest subsidy applies to a borrower’s Subsidized Loans, Unsubsidized Loans, PLUS Loans, and
Consolidation Loans (to the extent the underlying loans were first disbursed on or after October 1, 2008) disbursed on
or after October 1, 2008, while the borrower is serving on active duty in the Armed Forces or is performing qualifying
National Guard duty in an area of hostilities during a war or national emergency.
191 U.S. Department of Education, Office of Inspector General, Audit to Determine in Cohort Default Rates Provide
Sufficient Information on Defaults in the Title IV Loan Programs, ED-OIG/A03-C0017, December 22, 2003, pp. 9
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Since the HEA amendments that updated the two-year cohort default period to a three-year cohort
default period, some stakeholders192 have alleged, and at least one government report has found,
that some IHEs engage in practices to encourage borrowers to use forbearance options
specifically to aid the IHEs in meeting their CDR requirements, regardless of whether
forbearance is the most beneficial option to the borrower. In 2018, GAO found that some IHEs
and their default-management consultants193 encouraged borrowers with delinquent loans to
postpone future payments through forbearance, even though the use of forbearance may increase
a borrower’s total loan costs and may not be as beneficial to borrowers as other options such as
enrollment in certain repayment plans.194
Similar to the IDR plans, while a borrower’s use of deferment or forbearance may be considered
a positive outcome under the CDR metrics in that borrowers have not defaulted on their loans,
their treatment under the CDR metrics does not necessarily reflect the potential that borrowers
using these options may otherwise be struggling to make payments on their loans. This issue may
be exacerbated by institutional practices to encourage borrowers to use deferment and
forbearance in pursuit of lower CDRs.
COVID-19 Related Flexibilities
In response to the COVID-19 pandemic, Congress and ED have taken a number of steps to
provide relief and repayment flexibilities to federal student loan borrowers.195 Some of these have
had a material impact on CDRs while others may have a potentially smaller effect on them.
Payment Pause
From March 2020 to October 2023, most federal student loans196 were in a special administrative
forbearance (commonly referred to as a payment pause) to help address potential negative
financial effects of the COVID-19 pandemic on borrowers. During this time, most borrowers
were not required to make payments on their loans. ED announced that following the end of the
payment pause,197 a 12-month “on-ramp” to repayment would be available for borrowers. Under
this policy, from October 1, 2023, to September 30, 2024, borrowers who miss monthly payments
will not be considered delinquent on their loans and will not be placed into default.198 As with the
deferment and forbearance periods described above, during the payment pause borrowers were

192 See, for example, Pauline Abernathy, Lauren Asher, and Diane Cheng et al., Aligning the Means and the Ends: How
to Improve Federal Student Aid and Increase College Access and Success, The Institute for College Access and
Success, February 2013, pp. 23-24.
193 Some IHEs hire third-party default management consultants to help manage their default rates. IHEs may also work
directly with their student borrowers to prevent them from defaulting on their loans.
194 U.S. Government Accountability Office (GAO), Federal Student Loans: Actions Needed to Improve Oversight of
Schools’ Default Rates, GAO-18-163, April 26, 2018, pp. 14-26.
195 For information on this relief and repayment flexibilities, including options not discussed in this report, see CRS
Report R46314, Federal Student Loan Debt Relief in the Context of COVID-19.
196 These include all federal student loans held by ED, including all Direct Loan program loans.
197 See the Fiscal Responsibility Act of 2023 (P.L. 118-5) and ED, Office of Federal Student Aid, “COVID-19 Loan
Payment Pause and 0% Interest,” https://studentaid.gov/announcements-events/covid-19/payment-pause-zero-interest
(accessed June 22, 2023). For additional information on the payment pause and the policy, see CRS Report R46314,
Federal Student Loan Debt Relief in the Context of COVID-19.
198 U.S. Department of Education, “FACT SHEET: President Biden Announces New Actions to Provide Debt Relief
and Support for Student Loan Borrowers,” press release, June 30, 2023, https://www.ed.gov/news/press-releases/fact-
sheet-president-biden-announces-new-actions-provide-debt-relief-and-support-student-loan-borrowers.
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considered current on their loans and could not default. It appears the same would be true during
the on-ramp period.
The effects of these policies are currently being realized. For example, the CFY2020 CDR was
0.0% and ED has stated that the institutional CDRs for CFY2020 “were significantly impacted by
the pause on federal student loan payments.” Table 2 presents the national CDR for CFY2017-
CFY2020. It shows that in CFY2017, the cohort fiscal year just prior to the COVID-19 payment
pause being implemented, the national CDR was 9.7%. As the COVID-19 payment pause
progressed and more months of a cohort default period encompassed the payment pause, the
national CDR decreased, eventually to 0.0% in CFY2020.
Table 2. National Cohort Default Rates
CFY2017-CFY2020
CFY2017
CFY2018
CFY2019
CFY2020
9.7%
7.3%
2.3%
0.0%
Source: U.S. Department of Education, Office of Federal Student Aid, “National Default Rate Briefing for FY
2020 Official Cohort Default Rules,” electronic announcement (LOANS-23-10), September 29, 2023,
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2023-09-29/national-default-rate-
briefing-fy-2020-official-cohort-default-rates.
Notes: The CFY2017 CDR did not encompass any period during which the COVID-19 payment pause was in
effect, the CFY2018 CDR encompassed approximately six months during which the COVID-19 payment pause
was in effect, the CFY2019 CDR encompassed approximately 1.5 years during which the COVID-19 payment
pause was in effect, and the CFY2020 CDR encompassed approximately 2.5 years during which the COVID-19
payment pause was in effect.
Assuming that borrowers effectively will be unable to be considered delinquent on their loans
until October 1, 2024, and they would be unable to default on their loans until at least late
September 2025, institutional CDRs would be impacted through CFY2024 (released by ED in
September 2027). Moreover, the payment pause and on-ramp policy would presumably impact
IHEs’ ability to experience certain CDR penalties or benefits through the September 2029 CDR
determinations (i.e., the final cycle in which CFY2024 CDRs will be used to determine CDR
sanctions and benefits).
Loan Rehabilitation
If a borrower rehabilitates their loan prior to the end of the cohort default period, the borrower is
excluded from the numerator of an IHE’s CDR. In general, to rehabilitate a loan a borrower must,
within a 10-month period, voluntarily make nine reasonable and affordable monthly payments on
their defaulted loan within 20 days of the due date.199 Monthly payments suspended under the
COVID-19 payment pause count toward the nine monthly payments required to rehabilitate a
loan, so long as those paused payments occurred after a borrower entered into a rehabilitation
agreement with ED.200 This flexibility may enable some defaulted borrowers who would not have
otherwise rehabilitated their loan before the end of the cohort default period to do so; thus, they
would be excluded from the numerator of an IHE’s CDR. This flexibility is likely to impact
CDRs to a significantly lesser degree than the payment pause.201

199 HEA §§428F(a) and 435(m)(2)(C); 34 C.F.R. §§682.405(a)(2) and 685.211(f).
200 U.S. Department of Education, Office of Federal Student Aid, “COVID-19 Relief: Loans in
Default,” https://studentaid.gov/announcements-events/covid-19/default (accessed November 3, 2022).
201 In spring 2021, in response to the COVID-19 pandemic, ED announced the transfer of some GA-held FFEL
(continued...)
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Loan Cancellation
On June 30, 2023, the Biden Administration announced that it intends to undergo the rulemaking
process to provide “debt relief to as many working and middle-class borrowers as possible.”202
The scope of the policy has not yet been fully defined203; however, were it to broadly cancel at
least some student loan debt, it could have the potential to reduce the number of defaults that
would otherwise occur. This, in turn, could have the potential to make some IHEs’ CDRs lower
than they would be in the absence of the policy. Some IHEs that might have otherwise failed to
meet CDR thresholds may satisfy them, and some IHEs that would not have otherwise been
eligible for benefits associated with low CDRs may become eligible.
CDR Distribution Within and Across Institutional
Sectors
A primary criticism of the CDR rules, as currently constructed and applied, is that IHEs rarely fail
the CDR metrics, and when they do, they are rarely sanctioned for it (see Table 1).204 These
outcomes have led some to question whether the current CDR framework is a sufficient
institutional accountability metric.205
This section of the report examines more closely institutional performance under the current CDR
methodology, with a focus on performance within and across institutional sectors. In doing so,
CRS analyzes general institutional performance trends under the current CDR methodology but
does not suggest any particular performance threshold for consideration. CRS explores a single
year’s worth of CDRs (as opposed to examining institutional performance over three consecutive

program loans that had defaulted on or after March 13, 2020, to ED and the placement of such loans in good standing.
Such borrowers with active rehabilitation agreements could then have monthly payments suspended under the COVID-
19 payment pause count toward the nine monthly payments required to rehabilitate a loan. This action could potentially
result in some borrowers in a given cohort fiscal year rehabilitating their loans within the applicable cohort default
period and, thus, being excluded from an IHE’s CDR numerator. ED has stated the impact of such borrowers on
institutional CDRs “should be virtually undetectable,” as the proportion of Direct Loan borrowers who entered
repayment during the relevant cohort fiscal years is much higher.
Also in response to the COVID-19 pandemic, in April 2022 ED announced its Fresh Start initiative, under which
certain eligible borrowers who defaulted on their loans prior to March 20, 2020, are to be given the opportunity to bring
their loans out of default using streamlined procedures. The cohort fiscal years and cohort default periods that could be
affected by borrowers participating in this initiative lapsed prior to ED announcing the initiative. Thus, borrowers’
participation in the Fresh Start initiative would not have an effect on CDRs.
CRS email communication with ED, November 16, 2022.
202 U.S. Department of Education, “FACT SHEET: President Biden Announces New Actions to Provide Debt Relief
and Support for Student Loan Borrowers,” press release, June 30, 2023, https://www.ed.gov/news/press-releases/fact-
sheet-president-biden-announces-new-actions-provide-debt-relief-and-support-student-loan-borrowers.
203 This announcement was made in response to the Supreme Court’s June 30, 2023, ruling precluding the
Administration from implementing a previously announced broad-based student loan debt relief policy that would have
made available to millions of qualifying borrowers up to $10,000 or $20,000 of loan cancellation benefits per borrower.
For additional information on the policy, see CRS Insight IN11997, The Biden Administration’s One-Time Student
Loan Debt Relief Policy under the HEROES Act of 2003.
204 See, for example, Senate Committee on Health, Education, Labor & Pensions, Chairman Lamar Alexander, “Risk-
Sharing/Skin-in-the-Game Concepts and Proposals,” March 23, 2015, https://www.help.senate.gov/imo/media/
Risk_Sharing.pdf.
205 See, for example, U.S. Congress, House Committee on Education and the Workforce, Promoting Real Opportunity,
Success, and Prosperity through Education Reform Act, report to accompany H.R. 4508, 115th Cong., 2nd sess.,
February 8, 2018, H.Rept. 115-550 (Washington, DC: GPO, 2018), p. 205; and Third Way, Why the Cohort Default
Rate is Insufficient, November 7, 2017, https://www.thirdway.org/report/why-the-cohort-default-rate-is-insufficient.
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years, commensurate with some aspects of the current CDR framework) because many current
CDR benefits and sanctions are based on a single year’s worth of CDRs, and for simplicity. In
exploring institutional performance, the percentage of undergraduate students who received a Pell
Grant for enrollment206 at an IHE207 and status as an HBCU are also considered because they have
been of interest to stakeholders when considering institutional performance under the CDR
framework.208
In total, CRS examined institutional characteristics of 4,373 IHEs. This universe of schools
included all domestic IHEs with official CDRs for CFY2017 and institutional characteristics data
reported to ED’s Integrated Postsecondary Education Data System (IPEDS) for the relevant year.
For measures of the percentage of an IHE’s enrolled undergraduates who received a Pell Grant,
CRS excluded those schools that reported zero individuals enrolled as undergraduate students for
the relevant year. For a full description of CRS’s methodology for this analysis, see Appendix B.
Institutional Performance
Overall, few IHEs (about 1%) had CDRs that equaled or exceeded 30% for CFY2017; these IHEs
enrolled an even smaller percentage (0.1%) of all students (see Table A-1). About 3% of IHEs
had CDRs approaching the threshold, that is—equal to or greater than 25% but less than 30%—
and likewise these IHEs enrolled a small percentage (0.6%) of all students. Private for-profit less-
than-two-year IHEs made up the majority of IHEs with CDRs that equaled or exceeded 30%
(60% of all such IHEs) and of IHEs with CDRs that approached that threshold (54% of all such
IHEs).
Figure 2 depicts the distribution of IHEs based on CFY2017 CDRs in one percentage point
increments, by sector; the median CDR across all IHEs is represented by the red vertical line. The
median CDR across all IHEs with official CDRs issued in CFY2017 was 9.0%.
In general, private nonprofit four-year, public four-year, and private nonprofit two-year IHEs
tended to have CDRs at or below the median across all IHEs (Figure 2). Collectively, they
enrolled 46% (about 12 million) of all students (Table A-1).209 Public two-year institutions
generally had CDRs greater than the median across all IHEs and enrolled 27% of all students;
although, the large majority of public two-year IHEs with CDRs above the median had CDRs of
greater than 9% but less than 20%—well below statutory thresholds. Private for-profit
(proprietary) four-year IHEs were somewhat evenly dispersed between IHEs with CDRs that
were at or below the median across all IHEs and CDRs that were greater than the median, but
student enrollment was concentrated at IHEs with CDRs above the median.210

206 Pell Grant receipt is often used as a proxy measure for low-income students.
207 As described earlier in this report, an IHE undergoing a change in status (e.g., an IHE merges with or acquires
another IHE) may have another school’s CDR applied to it in a given year. Thus, it is possible that for a limited number
of IHEs examined here, the characteristics of the borrowers captured in the IHE’s CDR may not be reflective of the
IHE’s student body composition as reported in the Integrated Postsecondary Education Data System (IPEDS)—one of
the data sources used by CRS in this analysis.
208 HBCUs tend to enroll higher proportions of economically disadvantaged and first-generation students than non-
HBCUs. See, for example, Katherine M. Saunders, Krystal L. Williams, and Cheryl L. Smith, Fewer Resources, More
Debt: Loan Debt Burdens Students at Historically Black Colleges and Universities, p. 9, UNCF, Washington, DC,
2016.
209 Private nonprofit four-year and public four-year institutions enrolled the vast majority (99.8%) of these students.
210 Specifically, 70% of all students enrolled at proprietary four-year institutions were enrolled at such IHEs with CDRs
above the median.
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Figure 2. Distribution of IHEs Within Institutional Sectors by CFY2017 CDRs,
Examined in Relation to Median CDR for all IHEs

Source: CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default
Rate for Schools, press package for FY2017, https://fsapartners.ed.gov/sites/default/files/2021-09/
FY2017PressPackage.xlsx; and U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System.
Notes: CFY2017 = cohort fiscal year 2017. The red vertical line represents the median CDR across all IHEs that
had an official CDR for CFY2017, which equals 9%.
When considering the percentage of undergraduate students who received a Pell Grant, overall
those IHEs with CDRs of 25% or higher had average rates of Pell Grant receipt that were
noticeably higher than that of all IHEs (see Table A-1).211 However, there were certain sectors
where this trend did not hold: results were mixed regarding whether IHEs with CDRs of 25% or
higher within specific institutional sectors had higher-than- or lower-than-average rates of Pell
Grant receipt within the relevant sector (see Table A-1).

211 For measures of the percentage of an IHE’s enrolled undergraduates who received a Pell Grant, CRS excluded those
schools that reported zero individuals enrolled as undergraduate students for the relevant year.
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HBCUs were more likely than non-HBCUs to have CDRs approaching or exceeding 30%. While
HBCUs represent a small portion (2%)212 of all IHEs examined in this report, they accounted for
11% of all IHEs meeting the 30% threshold and 9% of all IHEs with CDRs equal to or greater
than 25% but less than 30%.213 Combined, these HBCUs enrolled 10% (about 30,000) of all
students enrolled at HBCUs but 0.1% of students enrolled at all IHEs (Table A-1).
Measures That Could Possibly Be Incorporated Into
a CDR-Style Accountability Metric: Student
Borrower Rates (SBRs) and Student Loan Dollar
Default Rates (SLDDRs)
The current CDR methodology may indicate the extent to which individuals who borrow certain
federal loans to attend an institution could have difficulties avoiding default in the first years
following their entry into repayment. However, it might not fully reflect the relative risk attending
a certain IHE could pose to prospective students, as it does not consider the extent to which
students who attend a particular IHE borrow.214 The relatively few borrowers who have difficulty
remaining out of default within three years of entering repayment may not be broadly reflective
of prospective applicants to a school. Factoring share of students borrowing could also be helpful
in gauging the federal government’s fiscal risk.
Incorporating a measure of the percentage of undergraduate and graduate students who borrowed
federal student loans to attend an IHE in a given academic year (the SBR), into a CDR-style
accountability metric may alleviate some of these issues. From the federal government’s
perspective, incorporation of the SBR could help it assess whether certain schools with high
student loan default rates pose a meaningful risk to it in terms of overall Title IV fiscal and
program integrity. From an IHE’s perspective, incorporation of the SBR could serve as
recognition that IHEs may pose varying levels of risk to students based on the extent to which
their student populations borrow. From a student’s or prospective student’s perspective,
incorporation of the SBR may serve as a consumer information tool, helping them asses how

212 In AY2015-2016, there were 101 HBCUs. Those HBCUs not examined in this report are those that did not have
official CDRs issued for CFY2017.
213 CRS also examined IHEs by their status as a Tribal College or University (TCU). Only three IHEs in the universe of
institutions examined in this report were such schools, as many TCUs either had fewer than 30 borrowers entering
repayment in CFY2017 and did not also have an official or unofficial CDR for either or both of the two previous fiscal
years or because they did not have data necessary to calculate a CDR for CFR2017 (e.g., they do not participate in the
student loan programs). Their CDRs were 4%, 22%, and 38%.
214 Current CDR rules recognize this potential dynamic to some extent with the availability of the participation rate
index (PRI) challenge and PRI appeal for IHEs with low rates of student loan borrowing among enrolled students (34
C.F.R. §§669.204(c) & 668.214). While the availability of the PRI challenge and PRI appeal may alleviate some
concerns regarding the utility of the CDR measure with respect to the relative risk an IHE poses to all of its enrolled
students and the federal government as a lender, criticisms have been raised that it is “opaque, complex, and too
limited,” as it only applies to those IHEs that choose to use it, it allows IHEs to submit enrollment data for a timeframe
that may be most beneficial to them, and data on IHEs that successfully submit PRI challenges and appeals are not
readily available for current and prospective students to evaluate. Lindsay Ahlman, Debbie Cochrane, and Jessica
Thompson, A New Approach to College Accountability: Balancing Sanctions and Rewards to Improve Student
Outcomes, The Institute for College Access & Success, working paper, December 2016, p. 6, https://ticas.org/files/
pub_files/ticas_risk_sharing_working_paper.pdf.
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likely it is to be necessary to borrow to attend a particular IHE and, if so, how likely it may be for
them to default on those loans.
Additionally, the current CDR provides only a blunt measure of an IHE’s financial risk to the
federal government as the holder of defaulted loans. For instance, under the current CDR
methodology, each default counts the same, regardless of whether the defaulted loan amount is
high or low. For stakeholders (e.g., taxpayers) interested in federal financial outcomes, a measure
that takes into account each default by dollar amount (the SLDDR) would provide more
information about the financial risk presented by borrowers at each IHE. It may also provide
additional information to borrowers and prospective borrowers about the relative financial risk, in
terms of the overall amount of student loan debt owed by defaulted borrowers, of borrowing for
enrollment at a particular school.
An Initial Look at How SBRs and SLDDRs Align
with CDRs Within and Across Sectors
CDRs and Student Borrower Rates
To examine the relationship between IHEs’ CDRs and the rate at which IHEs’ students borrow
federal student loans, CRS constructed a student borrower rate.215 The SBR is the percentage of
graduate and undergraduate students who borrowed a Direct Loan to attend an IHE in a given
academic year.216 CRS then divided IHEs into four categories (quadrants) based on their relative
performance under the CFY2017 CDR and the frequency of borrowing as measured by an
AY2015-2016 SBR across all IHEs. The AY2015-2016 SBR represents the percentage of an
IHE’s enrolled students who borrowed a Direct Loan for enrollment in AY2015-2016, the final
year in which a student loan borrower captured by the CFY2017 CDR would have been enrolled.
The four categories are the following:
1. High CDR/High SBR: These are IHEs with CDRs that exceeded the median
CDR of all IHEs (9.0%) and SBRs that exceeded the median SBR of all IHEs
(46.4%).
2. High CDR/Low SBR: These are IHEs with CDRs that exceeded the median
CDR of all IHEs and SBRs that were equal to or less than the median SBR of all
IHEs.
3. Low CDR/Low SBR: These are IHEs with CDRs that were equal to or less than
the median CDR of all IHEs and SBRs that were equal to or less than the median
SBR of all IHEs.
4. Low CDR/High SBR: These are IHEs with CDRs that were equal to or less than
the median CDR of all IHEs and SBRs that exceeded the median SBR of all
IHEs.

215 For a description of CRS’s methodology for this analysis, see Appendix B.
216 This differs from the PRI challenge and appeal methodologies in a few ways. First, it uses a standardized time frame
for measuring student enrollment rather than one selected by the IHE. Second, under the PRI methodologies student
enrollment includes the number of students enrolled at least half-time. Under the SBR, student enrollment includes the
total number of students enrolled regardless of their enrollment status (i.e., it includes students enrolled at least half-
time and less-than-half-time). This may be an important distinction, as students are ineligible to borrow Direct Loan
program loans if they are enrolled less-than-half-time. IPEDS (the data source CRS used to determine student
enrollment) does not disaggregate student enrollment based on half-time and less-than-half-time status. For additional
information on the methodology CRS used to construct this measure, see Appendix B.
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Figure 3 depicts institutional performance under the above schema by sector.217 Each dot in each
graph represents a single IHE. For each graph within the figure, the upper right quadrant depicts
IHEs that are High CDR/High SBR; the upper left quadrant depicts High CDR/Low SBR IHEs;
the lower left quadrant depicts Low CDR/Low SBRs IHEs; and the lower right quadrant depicts
Low CDR/High SBR IHEs.
Figure 3. Distribution of IHEs by CFY2017 Cohort Default Rates and AY2015-2016
Student Borrower Rate
By Sector

Source: CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default
Rate for Schools, press package for FY2017, https://fsapartners.ed.gov/sites/default/files/2021-09/
FY2017PressPackage.xlsx; U.S. Department of Education, National Center for Education Statistics, Integrated

217 At least one other organization has completed an analysis to adjust IHEs’ CDRs by the percentage of enrolled
students who borrowed. A key way in which their analysis differs from that presented here is that it did not account for
enrolled graduate students. In addition, the organization’s analysis multiplied CDRs by the percentage of an IHE’s
enrolled students who borrowed to create a new metric. Doing so may have certain advantages, but does not map
institutional performance under the CDR against the student borrower rate. See Lindsay Ahlman, Debbie Cochrane,
and Jessica Thompson, A New Approach to College Accountability: Balancing Sanctions and Rewards to Improve
Student Outcomes, The Institute for College Access & Success, working paper, December 2016, p. 6, https://ticas.org/
files/pub_files/ticas_risk_sharing_working_paper.pdf.
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Postsecondary Education Data System; and special tabulation of data provided to CRS by the U.S. Department of
Education, July 13, 2022.
Notes: The student borrower rate (SBR) is the percentage of graduate and undergraduate students who
borrowed a Direct Loan program loan to attend an IHE in academic year AY2015-2016. The red vertical line in
each graph represents the median AY2015-2016 SBR for all IHEs: 46.4%. The red horizontal line in each graph
represents the median CDR across all IHEs that had an official CDR for CFY2017: 9.0%. IHEs with CDRs that
exceeded 40% (12 IHEs) were assigned a CDR value of 40%. For privacy purposes, CRS omitted from this figure
56 IHEs with borrower counts in AY2015-2016 that were equal to or greater than one but less than ten. The
majority of these IHEs (39%) were private nonprofit four-year institutions, with private for-profit less-than-two-
year institutions (21%), public two-year institutions (14%), and private nonprofit two-year institutions (13%)
fol owing. The remaining sectors each made up less than 10% of all such IHEs. The mean CDR for these IHEs
was 8.5% (6.7% median), and their mean SBR was 9.8% (4.2% median).
Institutional Performance
Overall, IHEs were somewhat evenly dispersed across the quadrants, although numbers of
students enrolled and borrowers associated with such schools were not (see Table A-2). The
smallest percentage of students (8%) and borrowers (15%) enrolled in High CDR/High SBR
institutions, while the largest percentage of borrowers (35%) and second largest percentage of
students (37%) enrolled in Low CDR/Low SBR institutions.
IHEs that are High CDR/High SBR may be of the most interest in evaluating institutional
performance, as such IHEs presumably pose the highest risk (in terms of potential for loan
default) for students relative to the other three categories. Private for-profit two-year, private for-
profit less-than-two-year, and public less-than-two-year institutions had the highest rates of High
CDR/High SBR IHEs—50% (190 institutions), 46% (359 institutions), and 43% (54 institutions),
respectively (Figure 3). Together, IHEs in these sectors occupying these quadrants accounted for
about 2% of all enrolled students and 3% of all borrowers (Table A-2).
Of note, a high proportion of public two-year institutions (87%) were High CDR/Low SBR,
reflecting the fact that not many students who enrolled at these institutions borrowed but when
they did, they were more likely to default on their loans within three years of entering repayment
(Figure 3).
IHEs that were High CDR/High SBR and enrolled undergraduate students in AY2015-2016218 had
a higher average rate of Pell Grant receipt compared to IHEs in the other quadrants (Table A-1).
The average rate of Pell Grant receipt across High CDR/High SBR IHEs equaled 58%, while the
average rate of Pell Grant receipt across IHEs in other categories ranged from 30% to 37%.
HBCUs were more likely than non-HBCUs to be High CDR/High SBR: about 83% of HBCUs
were High CDR/High SBR, while 23% of all IHEs were High CDR/High SBR (Table A-2).219
CDRs and Student Loan Dollar Default Rates
To examine the relationship between IHEs’ CDRs and the amount of student loan dollars owed on
loans borrowed to attend an IHE by defaulting borrowers relative to the total amount of student
loan dollars borrowed to attend an IHE by all of an IHE’s borrowers, CRS constructed a student

218 In total, 1,308 IHEs were High CDR/High SBR. Of those, 931 (about 90%) enrolled undergraduate students in
AY2015-2016.
219 CRS also examined IHEs by their status as a TCU. Only three IHEs in the universe of institutions examined in this
report were such schools, as many TCUs either had fewer than 30 borrowers entering repayment in CFY2017 and did
not also have an official or unofficial CDR for either or both of the two previous fiscal years or because they did not
have data necessary to calculate a CDR for CFR2017 (e.g., they do not participate in the student loan programs). Of
those three TCUs, two were High CDR/Low SBR and one was Low CDR/Low SBR.
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loan dollar default rate (SLDDR).220 The SLDDR is the outstanding principal and interest balance
three years after entering repayment for all CDR-relevant loans221 of borrowers included in an
IHE’s CDR numerator222 (i.e., borrowers who defaulted within three years of entering repayment
in a given year) divided by the outstanding principal and interest balance at the time of entry into
repayment for all CDR-relevant loans of borrowers included in an IHE’s CDR denominator223
(i.e., all borrowers who entered repayment in a given year), multiplied by 100, and truncated to
the tenth decimal place.224 CRS then divided IHEs into four categories (quadrants) based on their
relative performance under the CFY2017 CDR and CFY2017 SLDDR across all IHEs. The
CFY2017 SLDDR represents the amount of outstanding principal and interest balances owed
three years after entering repayment by all of an IHE’s borrowers who entered repayment in
FY2017 and defaulted by the end of FY2019 relative to the outstanding principal and interest
balance at the time of entry into repayment for all of an IHE’s borrowers who entered repayment
in FY2017. The four categories are the following:
1. High CDR/High SLDDR: These are IHEs with CDRs that exceeded the median
CDR of all IHEs (9.0%) and SLDDRs that exceeded the median SLDDR of all
IHEs (2.1%).
2. High CDR/Low SLDDR: These are IHEs with CDRs that exceeded the median
CDR of all IHEs and SLDDRs that were equal to or less than the median SLDDR
of all IHEs.
3. Low CDR/Low SLDDR: These are IHEs with CDRs that were equal to or less
than the median CDR of all IHEs and SLDDRs that were equal to or less than the
median SLDDR of all IHEs.
4. Low CDR/High SLDDR: These are IHEs with CDRs that were equal to or less
than the median CDR of all IHEs and SLDDRs that exceeded the median
SLDDR of all IHEs.
Figure 4 depicts institutional performance under the above schema by sector. Each dot in each
graph represents a single IHE. For each graph within the figure, the upper right quadrant depicts
IHEs that were High CDR/High SLDDR; the upper left quadrant depicts High CDR/Low SLDDR
IHEs; the lower left quadrant depicts Low CDR/Low SLDDR IHEs; and the lower right quadrant
depicts Low CDR/High SLDRR IHEs.

220 For a description of CRS’s methodology for these analyses, see Appendix B.
221 CDR-relevant loans are those loans that are considered in determining whether a borrower is included in an IHE’s
CDR calculation: FFEL program or Direct Loan program Subsidized Loans or Unsubsidized Loans borrowed to attend
the IHE.
222 Principal balance is the sum of borrowers’ principal balances, and interest balance is the sum of borrowers’
outstanding interest that accrued on their loans since they entered repayment. Both principal and interest balances are
special tabulations provided to CRS by ED and are as of the date ED calculated such balances for CDR purposes,
which was August 8, 2020, for CFY2017.
223 Principal balance is the sum of all borrowers’ principal balances, and interest balance is the sum of all borrowers’
outstanding interest that accrued on their loans since they entered repayment. Both principal and interest balances are
special tabulations provided to CRS by ED and are as of the date that balances were recorded in ED’s loan history
tables in its National Student Loan Data System and closest to the date on which a borrower’s loans entered repayment.
224 This could be considered as a somewhat parallel construction to the current CDR methodology, except that it uses
student loan dollars as the unit of analysis rather than borrowers. However, it is possible that not all loans included in
the SLDDR numerator are in default, as loan dollar amounts were included in the numerator based on whether the
borrower defaulted on any relevant loan, not on whether the borrower defaulted on a particular loan. For example, if a
borrower defaulted on one loan with a balance of $10,000 but did not default on a second loan with a balance of
$5,000, both loans (totaling $15,000) would be included in the numerator.
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Figure 4. CFY2017 Cohort Default Rates and
FY2017 Student Loan Dollar Default Rates
By Sector

Source: CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default
Rate for Schools, press package for FY2017, https://fsapartners.ed.gov/sites/default/files/2021-09/
FY2017PressPackage.xlsx; U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System; and special tabulation of data provided to CRS by the U.S. Department of
Education, July 13, 2022.
Notes: The FY2017 student loan dol ar default rate (SLDDR) is the outstanding principal and interest balance
three years after entering repayment for all CDR-relevant loans of borrowers who entered repayment on their
loans in FY2017 and defaulted on any of those loans within three years divided by the outstanding principal and
interest balance at the time of entry into repayment for all CDR-relevant loans of all borrowers who entered
repayment in FY2017, and multiplied by 100.
CDR-relevant loans are those loans that were considered in determining whether a borrower is included in the
IHE’s CDR calculation and include FFEL program or Direct Loan program Subsidized Loans or Unsubsidized
Loans borrowed to attend the IHE. The red vertical line in each graph represents the median FY2017 SLDDR for
all IHEs: 2.1%. The red horizontal line in each graph represents the median CDR across all IHEs that had an
official CDR for CFY2017: 9.0%. IHEs with CDRs that exceeded 40% (12 IHEs) were assigned a value of 40%.
IHEs with SLDDRs that exceeded 20% (14) were assigned a value of 20%. For privacy purposes, CRS omitted
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from this figure 56 IHEs with borrower counts in AY2015-2016 that were equal to or greater than one but less
than ten. The majority of these IHEs (39%) were private nonprofit four-year institutions, with private for-profit
less-than-two-year institutions (21%), public two-year institutions (14%), and private nonprofit two-year
institutions (13%) fol owing. The remaining sectors each made up less than 10% of all such IHEs. The mean CDR
for these IHEs was 8.5% (6.7% median), and their mean SLDDR was 4.0% (1.9% median).
Institutional Performance
Overall, institutional CDRs and SLDDRs tend to align somewhat closely, as indicated by the
relatively linear distribution of IHEs within each graph.225 That is, IHEs with high CDRs
generally have relatively high SLDRRs, and IHEs with low CDRs generally have low SLDDRs.
Overall, IHEs most often sort into either the Low CDR/Low SLDDR grouping (45% of all IHEs)
or the High CDR/High SLDDR (44% of IHEs) grouping. While Low CDR/Low SLDDR IHEs
accounted for the majority of student loan dollars borrowed (68%, $51 billion) and High
CDR/High SLDDR IHEs accounted for a relatively low percentage of student loan dollars
borrowed (18%, $14 billion) across all IHEs, both types of IHEs accounted for fairly similar
percentages of student loan dollars owed by defaulted borrowers (40%, $478 million and 44%,
$531 million, respectively). Additionally, all IHEs’ CDRs were greater than their SLDDRs. This
is an indication that on average, defaulted borrowers owed lower amounts of federal student loan
debt than the average amount borrowed by all students attending a certain IHE.226
IHEs that are High CDR/High SLDDR may be of most interest in evaluating institutional
performance, as such IHEs presumably pose the highest risk for the federal government as a
lender relative to IHEs in the other three quadrants. Public two-year IHEs had the highest rate of
High CDR/High SLDDR institutions (87%). High CDR/High SLDDR public two-year IHEs
accounted for 8% (about $6 billion) of student loans borrowed across all IHEs but 22% ($259
million) of student loan dollars owed by all defaulters across all IHEs—the highest share of
student loan dollars owed by defaulters across all IHEs, regardless of quadrant (Figure 4 and
Table A-3, respectively).
Overall, IHEs that were High CDR/High SLDDR had higher average rates of Pell Grant receipt
compared to IHEs in the other quadrants (Table A-3). Low CDR/Low SLDDR IHEs had lower
averages rates of Pell Grant receipt than all IHEs.
HBCUs were more likely to be High CDR/High SLDDR institutions than non-HBCUs: about
72% of HBCUs were High CDR/High SLDDR, while about 44% of all IHEs were High
CDR/High SLDDR (Table A-3).227

225 This is likely due to the fact that the SLDDR has a similar construction to the CDR in terms of time periods, loan
types, and cohorts of borrowers covered by the relevant calculations.
226 Across sectors and quadrants, CRS also examined the average outstanding principal and interest balances for all
borrowers contained in the CDR denominator and for defaulted borrowers in the CDR numerator, both at time of entry
into repayment and at the end of CFY2017. In general, the analysis revealed few trends in institutional performance
across sectors and quadrants. However, the analysis did reveal that for all sectors and quadrants, loan balances at both
entry into repayment and at the end of CFY2017 for defaulted borrowers were considerably lower than those of all
borrowers. This analysis excluded consideration of PLUS Loans to graduate students and to parents of dependent
undergraduate students.
227 CRS also examined IHEs by their status as a TCU. Only three IHEs in the universe of institutions examined in this
report were such schools, as many TCUs either had fewer than 30 borrowers entering repayment in CFY2017 and did
not also have an official or unofficial CDR for either or both of the two previous fiscal years or because they did not
have data necessary to calculate a CDR for CFR2017 (e.g., they did not participate in the student loan programs). Of
those three TCUs, two were High CDR/High SLDDR and one was Low CDR/Low SLDDR.
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Policy Considerations
The CDR was initially devised as an institutional accountability metric intended to help address
high incidence of default in the federal student loan program. At the time of its creation and
throughout its history, one assumption underlying the CDR was that if an IHE was of sufficient
quality, it would provide students with the skills to enable them to stay out of default on their
loans. Although the CDR framework has evolved over the years to address some issues or
changes in the federal student aid landscape (e.g., the transition from a two-year to three-year
CDR to account for borrower use of deferment and forbearance options), it has not evolved to
account for other developments, such as the wide availability and use of IDR plans. The
framework’s fixed nature in more recent years might lead to questions about whether the CDR as
it currently stands may be viewed as a sufficient institutional accountability metric. Congress
might explore making adjustments to or eliminating altogether the CDR framework to address
issues with its perceived utility or changes in the federal student loan programs.
Adjusting the CDR Thresholds
A primary criticism of the CDR rules as they are currently constructed and applied is that IHEs
rarely fail the CDR metrics, and when they do, they are rarely sanctioned for it.228 As a first step
to addressing this concern, the conceptual aim of the current CDR framework may need
clarification. If the aim of the framework is similar to its original intent—to weed out relatively
poorly performing (i.e., high borrower loan default) schools from Title IV programs—then the
CDR framework may be viewed as ineffective, as few IHEs face sanctions under it. If, however,
the aim of the framework has shifted and it is now intended to be a preventative measure to
encourage IHEs to avoid unwanted behavior, then the fact that few IHEs face sanctions could be
viewed as evidence of the CDR’s effectiveness, assuming that in the metric’s absence some IHEs
might have higher default rates.
If the CDR framework is intended to weed out relatively poorly performing IHEs, Congress
might consider whether to adjust the thresholds for the application of CDR sanctions downward,
as this would presumably lead to more IHEs failing to meet lower CDR thresholds. Lowering
CDR thresholds may also have a preventative effect, as IHEs at risk of exceeding lower CDR
thresholds might implement strategies to ensure compliance with the lower threshold.
Stakeholder concern over the potential for decreased access to postsecondary education for
underrepresented groups has been consistent throughout the CDR’s history and may continue to
be so under the current CDR framework or if CDR thresholds were lowered. Concerns may be
raised that some IHEs might effectively be penalized for enrolling high proportions of
underserved student populations.229 Some IHEs may be discouraged from enrolling students who
might be more likely to default on federal student loans, while other IHEs might be discouraged
from participating in the Direct Loan program altogether. With the wide availability of student
loan borrower benefits such as IDR plans, however, questions may be raised about whether IHEs
with higher proportions of student loan borrowers experiencing severe student loan outcomes
such as default should be permitted to disburse additional loans to students. Such outcomes may
point to issues with an institution’s Title IV administrative capability, but other factors potentially

228 See, for example, Senate Committee on Health, Education, Labor & Pensions, Chairman Lamar Alexander, “Risk-
Sharing/Skin-in-the-Game Concepts and Proposals,” March 23, 2015, https://www.help.senate.gov/imo/media/
Risk_Sharing.pdf.
229 Similar arguments have been raised, for example, in the context of the HEA Title IV 90/10 Rule. See CRS Report
R46773, The 90/10 Rule Under HEA Title IV: Background and Issues.
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affecting an IHE’s CDR, like poor loan servicing or information asymmetry with respect to
student loan benefits, may be beyond an IHE’s control. Analyses in this report indicate that most
IHEs might not exceed CDR thresholds at modestly lower levels (25%). Thus, few IHEs, and by
extension their students, may be in danger of the potential loss of Title IV eligibility due to
meeting modestly lower CDR thresholds.230
Supplementing the CDR
Another option to address concerns surrounding the CDR’s utility may be to supplement the CDR
by either incorporating additional measures of assessing institutional accountability like the SBR
or SLDDR into the CDR’s framework or to craft another student loan-centric metric such as one
that focuses on borrowers’ progress toward repayment to operate alongside the CDR.
Incorporating the SBR or SLDDR in a CDR-Style Metric
The SBR would provide a measure of students who attend an IHE and who borrow funds for
enrollment. This may help supplement the CDR by providing an indication of the extent to which
students (as opposed to borrowers) who attend a particular IHE are at risk of defaulting on federal
student loans. Incorporation of the SBR into the CDR framework may prove useful for many of
the key players in the federal student loan programs.
From the federal government’s perspective, incorporation of the SBR could help it assess whether
certain schools with high student loan default rates pose a meaningful risk to it in terms of overall
Title IV fiscal and program integrity. For example, with this information, federal policy might be
focused on those IHEs with both high CDRs and high SBRs, which presumably pose the highest
risk to the integrity of the federal student loan programs. From a student’s or prospective student’s
perspective, incorporation of the SBR may serve as a consumer information tool, helping them
asses how likely it is to be necessary to borrow to attend a particular IHE and, if so, how likely it
may be for them to default on those loans.
Incorporation of an SLDDR into the CDR framework may serve as an indicator of the relative
financial risk an IHE poses to key stakeholders, as it would account for the amount of federal
student loans owed by loan defaulters three years after entry into repayment. For those
stakeholders interested in federal financial outcomes (e.g., the federal government, taxpayers), the
SLDDR would provide more information about the financial risk to the federal government
presented by borrowers at an IHE.
For borrowers or potential borrowers, the SLDDR may provide additional consumer information
about the relative financial risk of borrowing for enrollment at a particular school. Specifically, it
may provide additional consumer information regarding the amount owed by defaulted borrowers
associated with an IHE, which may inform their enrollment or borrowing decisions. However, the
administrative consequences of loan default (e.g., acceleration of the loan, loss of eligibility for
certain borrower benefits, report of the default to consumer reporting agencies)231 are the same for
borrowers regardless of amount owed, so in those respects the SLDDR’s utility may be limited.

230 Some research indicates that in the early 1990s following CDR sanctions of many private for-profit institutions,
enrollment at private for-profit institutions decreased notably while it simultaneously increased at institution in other
sectors. This suggests that the use of the CDR framework may not have resulted in an overall decrease in students’
access to postsecondary education at the time. See Stephanie R. Cellini, Rajeev Darolia, and Lesley J. Turner, “Where
Do Students Go When For-Profit Colleges Lose Federal Aid?,” American Economic Journal: Economic Policy , vol.
12, no. 2 (May 2020), pp. 46-83.
231 For additional information on the consequences of loan default, see CRS Report R45931, Federal Student Loans
Made Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
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Analyses in this report found that IHEs’ CDRs and SLDDRs are closely aligned; thus, it is
unclear whether additional information to be gleaned from incorporation of an SLDDR into the
existing CDR framework would be of great value to the federal government in terms of its
interest in ensuring the fiscal integrity of the federal student aid programs. Nonetheless, if a
reconstructed CDR framework incorporated SLDDRs to weight or rank school performance, for
instance, there may be more potential for mitigating federal fiscal risk. The SLDDR used in this
report was constructed to align with how the current CDR is calculated (i.e., PLUS Loans to
graduate students and to parents of dependent undergraduate students were excluded). The
inclusion of PLUS Loans in the CDR and/or the SLDDR may reveal differing trends.
While the utility of incorporating the SBR and/or the SLDDR into a CDR-style metric may be
debated and precise institutional performance under each may vary, two trends emerge when
mapping either against the current CDR. First, in general, IHEs that might be considered to be
performing poorly under either measure mapped against the CDR tended to have higher average
rates of Pell Grant receipt than other IHEs; and second, HBCUs were more likely than non-
HBCUs to perform in a manner that might be of concern to some stakeholders in terms of
borrower outcomes (i.e., they tended to be High CDR/High SBR, and to be High CDR/High
SLDDR). Should Congress consider incorporating the measures explored in this report into a
CDR framework, these trends may be worth noting, and could help inform policy and design
choices in light of college access considerations.
Considering Progress Toward Repayment
Congress might also consider other institutional accountability measures not evaluated in this
report to supplement the CDR. Myriad alternative institutional accountability metrics related to
the performance of federal student loans have been proposed in recent years. These include
proposals to measure the percentage of an IHE’s borrowers who are able to make payments on
their loans in a timely manner,232 proposals to assess the share of an IHE’s borrowers who are
able to pay down at least $1 of the principal amount of the federal student loans they borrowed
within a specified timeframe,233 and others.234 Although the approaches under each of the
proposals vary, they all tend to focus on a borrower’s ability to repay their student loan debt,
rather than on their ability to avoid the worst consequence of nonpayment—default. Examination
of these types of institutional accountability measures would likely warrant extensive
consideration beyond the scope of this report, but could include deliberation on issues with and
lessons learned from the CDR framework, including the following:
• a potential policy’s aims (e.g., punitive and/or preventative) and whether it is
sufficiently targeted to meet those goals,
• the incentives driving key stakeholders’ decisions and their reactions to a
potential policy (e.g., would an incentive to comply with a policy result in
unwanted behavior from IHEs?),
• interactions between the potential policy and other federal student aid policies
(e.g., how might federal student loan terms and conditions affect an IHE’s
performance under a proposed metric?), and

232 See, for example, H.R. 4674 (116th Congress).
233 See, for example, S. 5072 (118th Congress).
234 See, for example, J. Oliver Schak, A Policymaker’s Guide to Using New Student Debt Metrics to Strengthen Higher
Education Accountability, The Institute for College Access and Success, 2021, https://ticas.org/wp-content/uploads/
2021/03/Student-debt-metrics-exec-summary.pdf.
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• whether the policy is sufficiently flexible to respond to unforeseen circumstances
or changes in other student aid policies, and potential implementation challenges
(e.g., data availability).
Eliminating the CDR
Alternatively, Congress might consider whether to eliminate the CDR framework altogether, as
some stakeholders contend that developments in the federal student loan programs, such as the
utilization of more generous IDR plans that may decrease incidents of default on a federal student
loan, render “the CDR measure effectively worthless in the long-term for the purposes of
measuring institutional quality.”235 Eliminating the measure altogether may free up administrative
resources at ED and IHEs, as neither entity would be required to devote resources to oversight of
and compliance with the measure. However, without replacing the CDR with another institutional
accountability measure, it is possible that issues like those Congress and the Administration
sought to address in the establishment of the CDR, such as incidents of fraud in the federal
student loan programs or subpar aid administration policies, may surface again or become
exacerbated.
Amending the CDR Calculation
Members of Congress and outside stakeholders have made a variety of other proposals to amend
the CDR calculation aimed at addressing concerns about the current CDR’s utility that might be
explored further by Congress.
Accounting for Periods of Deferment or Forbearance
One such proposal would be to adjust the CDR calculation to account for periods of deferment or
forbearance, potentially by either extending the cohort default period to capture a longer period of
borrower repayment activity or by considering loans in forbearance for a specified period of time
as in default for purposes of calculating an IHE’s CDR.236
Congress has previously extended the cohort default period (from two years to three years) to
similarly address concerns about the CDR’s utility. The national CDR rate peaked relatively early
following the switch from the two-year to the three-year cohort default period and then slowly
decreased to levels well below the 30% CDR threshold (see Figure 1). This trend, along with the
findings of at least one GAO report,237 may indicate that IHEs adjusted their practices to meet the
more stringent standards. However, other factors related to student loan borrower flexibilities,
such as the increased availability and take up of IDR plans, may also be playing a role in IHEs’
continued ability to meet CDR requirements. Should Congress consider extending the cohort
default period, it might explore how the availability of these other student loan flexibilities affects
CDR outcomes or options to curtail particular undesirable institutional behavior aimed at
ensuring compliance with the CDR.
A proposal to consider loans in forbearance for a specified period of time as in default for
purposes of calculating an IHE’s CDR could address some of the same concerns as extending the

235 Letter from Kelly McManus, Vice President of Higher Education, Arnold Ventures, and Clare McCann, Higher
Education Fellow, Arnold Ventures, to Richard Blasen, U.S. Department of Education, February 10, 2023,
file:///C:/Users/adhegji/Downloads/ED-2023-OPE-0004-13269_attachment_1.pdf.
236 See, for example, H.R. 4674 (116th Congress).
237 U.S. Government Accountability Office (GAO), Federal Student Loans: Actions Needed to Improve Oversight of
Schools’ Default Rates, GAO-18-163, April 26, 2018, pp. 14-26.
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cohort default period and would address at least one institutional practice of concern that has been
identified: encouraging borrowers to enter forbearance on their loans regardless of whether that is
the most beneficial option for them.
Including PLUS Loans
Another adjustment to the CDR framework that some stakeholders have proposed is the inclusion
of PLUS Loans to parents of dependent undergraduate students (Parent PLUS Loans) and to
graduate and professional students (Grad PLUS Loans) in the CDR calculation.238 Although the
precursor to Parent PLUS Loans was first authorized in 1980, loans to parents to assist in
financing their dependent undergraduate student’s education have never been included in the
CDR framework. Since 1992, there have been no aggregate borrowing limits for Parent PLUS
Loans. Grad PLUS Loans were first authorized in 2006 and have never been included in the CDR
framework; there have never been aggregate borrowing limits for them.
It is unclear whether inclusion of Grad PLUS Loans in an IHE’s CDR under the current
framework would provide much clarity to institutional performance under the CDR, as many
Grad PLUS Loan borrowers may already be included in institutional CDRs. While Grad PLUS
Loans are currently excluded from the CDR, the CDR considers whether a particular borrower
defaulted on their loans. Thus, individuals who borrowed both Subsidized Loans239 and/or
Unsubsidized Loans and Grad PLUS Loans for their graduate or professional education at a
particular IHE would be captured in the IHE’s CDR denominator. Should such an individual
default on their Subsidized Loans and/or Unsubsidized Loans, they would also be included in the
numerator. Because federal policy requires that IHEs determine a graduate or professional
student’s maximum Unsubsidized Loan eligibility before originating Grad PLUS Loans to
them,240 many graduate and professional students are unlikely to have borrowed only Grad PLUS
Loans for enrollment at an IHE.241
Inclusion of Parent PLUS Loans in the CDR framework may provide for an additional level of
institutional accountability. Citing the absence of aggregate borrowing limits for Parent PLUS
Loans and their exclusion from institutional accountability measures such as the CDRs, some
stakeholders have described Parent PLUS Loans as “a no-strings-attached revenue source for
colleges and universities, with the risk shared only by parents and the government.”242 Inclusion
of Parent PLUS Loans in the CDR may help address some of these concerns in that an IHE’s
CDR would more fully depict the population of student loan borrowers and defaulters associated
with an IHE and may help better target federal policy interventions to IHEs that may be of greater
concern to the federal government, students, and their families.243 Doing so, however, would

238 See, for example, H.R. 5126 (117th Congress).
239 Prior to July 1, 2023, Subsidized Loans were available to graduate and professional students.
240 U.S. Department of Education, Office of Federal Student Aid, 2023-2024 Federal Student Aid Handbook, vol. 3, p.
42.
241 In some cases, a borrower may have met their aggregate Subsidized Loan and/or Unsubsidized Loan limits for their
graduate or professional education for enrollment at one IHE and may have borrowed Grad PLUS Loans for enrollment
at another IHE.
242 Sandy Baum, Kristin Blagg, and Rachel Fishman, Reshaping Parent PLUS Loans: Recommendations for
Regorming the Parent PLUS Program, Urban Institute, Washington, DC, April 2019, p. 10, https://www.urban.org/
sites/default/files/publication/100106/reshaping_parent_plus_loans.pdf.
243 For example, research indicates that, in general, Parent PLUS Loan borrowers are more successful in repaying their
loans than students (e.g., they are less likely to default), but like loans to student borrowers, there are disparities in
repayment outcomes among Parent PLUS Loan borrowers. For example, one piece of research calculated that default
rates among Parent PLUS Loan borrowers at private for-profit IHEs was 16%, compared to 6% at private nonprofit
(continued...)
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effectively treat two borrower populations (parents and students) with differing life experiences
and circumstances (e.g., a parent borrower may have a longer work history and earn a higher
salary than a newly graduated student) the same, which may add a level of uncertainty as to
whether an IHE is of sufficient educational quality.244

IHEs and 5% at public IHEs. See, for example, Sandy Baum, Kristin Blagg, and Rachel Fishman, Reshaping Parent
PLUS Loans: Recommendations for Reforming the Parent PLUS Program, Urban Institute, Washington, DC, April
2019, pp. 11-12, https://www.urban.org/sites/default/files/publication/100106/reshaping_parent_plus_loans.pdf; and
Wenhua Di, Carla Fletcher, and Jeff Webster, Parental Borrowing for College Comes with Repayment Issues, Federal
Reserve Bank of Dallas, Dallas, TX, 2018, p. 4, https://www.dallasfed.org/~/media/documents/research/swe/2018/
swe1803e.pdf.
244 Some proponents of including Parent PLUS Loans in an institutional accountability measure advocate for creation
of a separate Parent PLUS Loan CDR to address this issue. Sandy Baum, Kristin Blagg, and Rachel Fishman,
Reshaping Parent PLUS Loans: Recommendations for Reforming the Parent PLUS Program, Urban Institute,
Washington, DC, April 2019, p. 21, https://www.urban.org/sites/default/files/publication/100106/
reshaping_parent_plus_loans.pdf.
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Appendix A. Institutional Characteristics
Table A-1, Table A-2, a nd Table A-3 present information on characteristics of IHEs as measured
according to the CDR, the CDR paired with the SBR, and the CDR paired with the SLDDR. This
information includes institutional sector, student enrollment, the percentage of undergraduate
students who received a Pell Grant for enrollment at an IHE, and institutional status as a
Historically Black College or University (HBCU). Information provided is based on institutional
CDRs for CFY2017 and selected characteristics for AY2015-2016. This information supports the
analysis presented in the “CDR Distribution Within and Across Institutional Sectors” and “An
Initial Look at How SBRs and SLDDRs Align with CDRs Within and Across Sectors” sections of
this report.

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Table A-1. CFY2017 Cohort Default Rate (CDR) Bands: IHEs and AY2015-2016 Selected
Characteristics, by Sector and by HBCU Status
Average Percentage of
Undergraduates Receiving

IHEs
Student Enrollmenta
a Pell Grantb
CDR
#
%
#
%
%
All IHEs
Total
4,373
100
25,930,000
100
36
CDR ≥ 30%
53
1
28,000
0
53
25% ≤ CDR < 30%
114
3
150,000
1
55
CDR ≤ 9%c
2,216
51
13,830,000
53
32
CDR > 9%c
2,157
49
12,100,000
47
40
Public Four-Year
Sector Total
623
100
9,732,000
100
35
CDR ≥ 30%
0
0
–
0
–
25% ≤ CDR < 30%
3
1
6,000
0
59
CDR ≤ 9%c
415
67
7,595,000
78
33
CDR > 9%c
208
33
2,137,000
22
42
Private Nonprofit Four-Year
Sector Total
1,359
100
4,955,000
100
33
CDR ≥ 30%
7
1
5,000
0
85
25% ≤ CDR < 30%
11
1
15,000
0
66
CDR ≤ 9%c
1,081
80
4,276,000
86
29
CDR > 9%c
278
20
679,000
14
55
Private For-Profit Four-Year
Sector Total
176
100
1,549,000
100
53
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Average Percentage of
Undergraduates Receiving

IHEs
Student Enrollmenta
a Pell Grantb
CDR
#
%
#
%
%
CDR ≥ 30%
0
0
–
0
–
25% ≤ CDR < 30%
2
1
474
0
58
CDR ≤ 9%c
98
56
457,000
30
47
CDR > 9%c
78
44
1,092,000
71
55
Public Two-Year
Sector Total
796
100
8,974,000
100
34
CDR ≥ 30%
4
1
16,000
0
35
25% ≤ CDR < 30%
17
2
80,000
1
45
CDR ≤ 9%c
94
12
1,340,000
15
30
CDR > 9%c
702
88
7,634,000
85
35
Private Nonprofit Two-Year
Sector Total
106
100
71,000
100
65
CDR ≥ 30%
2
2
960
1
38
25% ≤ CDR < 30%
5
5
3,000
4
69
CDR ≤ 9%c
70
66
21,000
29
50
CDR > 9%c
36
34
50,000
71
70
Private For-Profit Two-Year
Sector Total
380
100
297,000
100
61
CDR ≥ 30%
7
1
859
0
52
25% ≤ CDR < 30%
11
3
7,000
2
77
CDR ≤ 9%c
146
38
66,000
22
59
CDR > 9%c
234
62
231,000
78
62
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Average Percentage of
Undergraduates Receiving

IHEs
Student Enrollmenta
a Pell Grantb
CDR
#
%
#
%
%
Public Less-Than-Two-Year
Sector Total
126
100
37,000
100
39
CDR ≥ 30%
1
1
162
0
92
25% ≤ CDR < 30%
2
2
459
1
26
CDR ≤ 9%c
42
33
7,000
18
53
CDR > 9%c
84
67
31,000
82
36
Private Nonprofit Less-Than-Two-Year
Sector Total
26
100
16,000
100
61
CDR ≥ 30%
0
0
–
0
–
25% ≤ CDR < 30%
0
0
–
0
–
CDR ≤ 9%c
10
39
4,000
24
46
CDR > 9%
16
62
12,000
77
66
Private For-Profit Less-Than-Two- Year
Sector Total
781
100
299,000
100
61
CDR ≥ 30%
32
4
5,000
2
66
25% ≤ CDR < 30%
63
8
39,000
13
65
CDR ≤ 9%c
260
33
65,000
22
54
CDR > 9%c
521
67
78
78
63
HBCUs
Sector Total
90
100
314,000
100
61
CDR ≥ 30%
6
7
6,000
2
83
25% ≤ CDR < 30%
10
11
24,000
8
64
CRS-50

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Average Percentage of
Undergraduates Receiving

IHEs
Student Enrollmenta
a Pell Grantb
CDR
#
%
#
%
%
CDR ≤ 9%c
7
8
37,000
12
57
CDR > 9%c
83
92
277,000
88
62
Source: CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default Rate for Schools, press package for FY2017,
https://fsapartners.ed.gov/sites/default/files/2021-09/FY2017PressPackage.xlsx; and U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System.
Notes: Details may not add to totals due to rounding.
a. Represents the 12-month unduplicated headcount of undergraduate and graduate students enrol ed for credit at an IHE at any point during AY2015-2016.
b. Excludes IHEs that reported zero individuals enrol ed as undergraduate students in AY2015-2016.
c. 9% was the median CFY2017 CDR for all IHEs examined.
Table A-2. CFY2017 Cohort Default Rates (CDRs) and AY2015-2016 Student Borrower Rates (SBR):
IHEs and AY2015-2016 Selected Characteristics, by Sector and by HBCU Status
Average Percentage
of Undergraduates
Student Enrollment
Receiving a Pell

IHEs
Borrowers (SBR Numerator)a
(SBR Denominator)b
Grantc
CDR/SBR
Quadrantsd
#
%
#
%
#
%
%
All IHEs
Total
4,373
100
8,222,000
100
25,930,000
100
36
High CDR/High SBRe
1,009
23
1,295,000
16
2,115,000
8
58
High CDR/Low SBRf
1,148
26
1,692,000
21
9,985,000
39
36
Low CDR/Low SBRg
1,039
24
2,895,000
35
9,631,000
37
31
Low CDR/High SBRh
1,177
27
2,339,000
28
4,199,000
16
37
CRS-51

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Average Percentage
of Undergraduates
Student Enrollment
Receiving a Pell

IHEs
Borrowers (SBR Numerator)a
(SBR Denominator)b
Grantc
CDR/SBR
Quadrantsd
#
%
#
%
#
%
%
Public Four-Year
Sector Total
623
100
3,646,000
100
9,732,000
100
35
High CDR/High SBRe
78
13
303,000
8
520,000
5
51
High CDR/Low SBRf
130
21
381,000
10
1,617,000
17
39
Low CDR/Low SBRg
272
44
2,011,000
55
5,775,000
59
32
Low CDR/High SBRh
143
23
951,000
26
1,820,000
19
36
Private Nonprofit Four-Year
Sector Total
1,359
100
2,257,000
100
4,955,000
100
33
High CDR/High SBRe
223
16
374,000
17
578,000
12
55
High CDR/Low SBRf
55
4
37,000
2
102,000
2
52
Low CDR/Low SBRg
460
34
761,000
34
2,389,000
48
24
Low CDR/High SBRh
621
46
1,086,000
48
1,887,000
38
35
Private For-Profit Four-Year
Sector Total
176
100
795,000
100
1,549,000
100
53
High CDR/High SBRe
61
35
337,000
42
558,000
36
61
High CDR/Low SBRf
17
10
205,000
26
534,000
35
49
Low CDR/Low SBRg
33
19
31,000
4
100,000
7
34
Low CDR/High SBRh
65
37
222,000
28
357,000
23
52
Public Two-Year
Sector Total
796
100
1,136,000
100
8,974,000
100
34
High CDR/High SBRe
7
1
7,000
1
13,000
0.1
73
CRS-52

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Average Percentage
of Undergraduates
Student Enrollment
Receiving a Pell

IHEs
Borrowers (SBR Numerator)a
(SBR Denominator)b
Grantc
CDR/SBR
Quadrantsd
#
%
#
%
#
%
%
High CDR/Low SBRf
695
87
1,037,000
91
7,621,000
85
35
Low CDR/Low SBRg
88
11
76,000
7
1,310,000
15
30
Low CDR/High SBRh
6
1
15,000
1
29,000
0.3
33
Private Nonprofit Two-Year
Sector Total
106
100
43,000
100
71,000
100
65
High CDR/High SBRe
29
27
32,000
74
47,000
67
71
High CDR/Low SBRf
7
7
1,000
1
3,000
4
41
Low CDR/Low SBRg
23
22
2,000
4
6,000
9
34
Low CDR/High SBRh
47
44
9,000
21
14,000
20
56
Private For-Profit Two-Year
Sector Total
380
100
165,000
100
297,000
100
61
High CDR/High SBRe
190
50
124,000
75
204,000
69
63
High CDR/Low SBRf
44
12
8,000
5
26,000
9
52
Low CDR/Low SBRg
44
12
5,000
3
20,000
7
55
Low CDR/High SBRh
102
27
28,000
17
46,000
16
61
Public Less-Than-Two-Year
Sector Total
126
100
13,000
100
37,000
100
39
High CDR/High SBRe
54
43
4,000
34
7,000
19
67
High CDR/Low SBRf
30
24
6,000
45
24,000
64
27
Low CDR/Low SBRg
14
11
1,000
7
4,000
10
50
Low CDR/High SBRh
28
22
2,000
14
3,000
8
55
CRS-53

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Average Percentage
of Undergraduates
Student Enrollment
Receiving a Pell

IHEs
Borrowers (SBR Numerator)a
(SBR Denominator)b
Grantc
CDR/SBR
Quadrantsd
#
%
#
%
#
%
%
Private Nonprofit Less-Than-Two-Year
Sector Total
26
100
4,000
100
16,000
100
61
High CDR/High SBRe
8
31
1,000
22
1,000
8
76
High CDR/Low SBRf
8
31
2,000
56
1,000
68
65
Low CDR/Low SBRg
7
27
1,000
17
3,000
22
46
Low CDR/High SBRh
3
12
191
5
314
2
48
Private For-Profit Less-Than-Two- Year
Sector Total
781
100
161,000
100
299,000
100
61
High CDR/High SBRe
359
46
112,000
70
186,000
62
66
High CDR/Low SBRf
162
21
16,000
10
48,000
16
52
Low CDR/Low SBRg
98
13
8,000
5
23,000
8
42
Low CDR/High SBRh
162
21
25,000
16
42,000
14
61
HBCUs
Total
90
100
196,000
100
314,000
100
61
High CDR/High SBRe
75
83
162,000
83
223,000
74
66
High CDR/Low SBRf
8
0
9,000
5
45,000
14
38
Low CDR/Low SBRg
–
0
0
0
–
0
–
Low CDR/High SBRh
7
8
24,000
13
37,000
12
57
Source: CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default Rate for Schools, press package for FY2017,
https://fsapartners.ed.gov/sites/default/files/2021-09/FY2017PressPackage.xlsx; and U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System.
Notes: Details may not add to totals due to rounding.
CRS-54

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a. Represents the total number of undergraduate and graduate students who borrowed a Direct Subsidized Loan, Unsubsidized Loan, or Graduate PLUS Loan to
attend an IHE in AY2015-2016.
b. Represents the 12-month unduplicated headcount of undergraduate and graduate students enrol ed for credit at an IHE at any point during AY2015-2016.
c. Excludes IHEs that reported zero individuals enrol ed as undergraduate students in AY2015-2016.
d. The SBR is the percentage of graduate and undergraduate students who borrowed a Direct Loan program loan to attend an IHE in AY2015-2016, truncated to the
tenth decimal place.
e. IHEs with CDRs that exceeded the median CDR of all IHEs (9%) and SBRs that exceeded the median SBR for all IHEs (46.4%).
f.
IHEs with CDRs that exceeded the median CDR of all IHEs (9%) and SBRs that were equal to or lower than the median SBR of all IHEs (46.4%).
g. IHEs with CDRs that were equal to or lower than the median CDR of all IHEs (9%) and SBRs that were equal to or lower than the median SBR of all IHEs (46.4%),
h. IHEs with CDRs that were equal to or lower than the median CDR of all IHEs (9%) and SBRs that exceeded the median SBR of all IHEs (46.4%).
Table A-3. CFY2017 Cohort Default Rates (CDRs) and FY2017 Student Loan Dollar Default Rates (SLDDR): IHEs
and AY2015-2016 Selected Characteristics, by Sector and by HBCU Status
Average
Dollars Borrowed by
Percentage of
All Borrowers
Undergraduates
Dollars Owed by Defaulters
(SLDDR
Receiving a Pell
(SLDDR Numerator; $ in
Denominator; $ in

IHEs
Student Enrollmenta
Grantb
thousands)c
thousands)d
CDR/SLDDR
Quadrante
#
%
#
%
%
$
%
$
%
All IHEs
Total
4,373
100
25,923,000
100
36
1,201,219
100
75,957,246
100
High CDR/High SLDDRf
1,909
44
10,054,000
39
39
530,963
44
13,796,029
18
High CDR/Low SLDDRg
248
6
2,045,000
8
47
174,292
15
10,143,197
13
Low CDR/Low SLDDRh
1,955
45
13,053,000
50
32
477,855
40
51,337,950
68
Low CDR/High SLDDRi
261
6
777,000
3
37
18,109
0
680,071
1
Public Four-Year
Sector Total
623
100
9,732,000
100
35
390,049
100
32,052,010
100
High CDR/High SLDDRf
137
22
1,314,000
14
42
73,189
19
2,336,687
7
High CDR/Low SLDDRg
71
11
823,000
9
43
58,113
15
3,236,765
10
CRS-55

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Average
Dollars Borrowed by
Percentage of
All Borrowers
Undergraduates
Dollars Owed by Defaulters
(SLDDR
Receiving a Pell
(SLDDR Numerator; $ in
Denominator; $ in

IHEs
Student Enrollmenta
Grantb
thousands)c
thousands)d
CDR/SLDDR
Quadrante
#
%
#
%
%
$
%
$
%
Low CDR/Low SLDDRh
403
65
7,495,000
77
33
257,078
66
26,412,711
82
Low CDR/High SLDDRi
12
2
100,000
1
54
1,669
0
65,846
0
Private Nonprofit Four-Year
Sector Total
1,359
100
4,955,000
100
33
263,090
100
24,862,184
100
High CDR/High SLDDRf
175
13
287,000
6
63
50,088
19
1,541,156
6
High CDR/Low SLDDRh
103
8
393,000
8
48
34,776
13
2,094,602
8
Low CDR/Low SLDDRh
1,022
75
4,205,000
85
29
172,007
65
20,993,771
84
Low CDR/High SLDDRi
59
4
71,000
1
59
6,219
2
232,656
1
Private For-Profit Four-Year
Sector Total
176
100
1,549,000
100
53
162,514
100
9,149,940
100
High CDR/High SLDDRf
46
26
374,000
24
54
46,146
28
1,621,740
18
High CDR/Low SLDDRg
32
18
718,000
46
55
76,117
47
4,546,274
50
Low CDR/Low SLDDRh
91
52
439,000
28
47
37,375
23
2,871,164
31
Low CDR/High SLDDRi
7
4
19,000
1
81
2,876
2
110,761
1
Public Two-Year
Sector Total
796
100
8,974,000
100
34
272,636
100
7,028,086
100
High CDR/High SLDDRf
691
87
7,540,000
84
35
258,650
95
6,126,287
87
High CDR/Low SLDDRh
11
1
94,000
1
38
4,002
2
190,906
3
Low CDR/Low SLDDRh
54
7
795,000
9
29
6,198
2
567,979
8
Low CDR/High SLDDRi
40
5
545,000
6
30
3,787
1
142,914
2
CRS-56

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Average
Dollars Borrowed by
Percentage of
All Borrowers
Undergraduates
Dollars Owed by Defaulters
(SLDDR
Receiving a Pell
(SLDDR Numerator; $ in
Denominator; $ in

IHEs
Student Enrollmenta
Grantb
thousands)c
thousands)d
CDR/SLDDR
Quadrante
#
%
#
%
%
$
%
$
%
Private Nonprofit Two-Year
Sector Total
106
100
71,000
100
65
10,030
100
320,137
100
High CDR/High SLDDRf
32
30
47,000
67
71
8,981
90
218,149
68
High CDR/Low SLDDRg
4
4
2,000
3
61
208
2
13,113
4
Low CDR/Low SLDDRh
66
62
17,000
24
53
712
7
84,406
26
Low CDR/High SLDDRi
4
4
4,000
6
35
128
1
4,470
1
Private For-Profit Two-Year
Sector Total
380
100
297,000
100
61
44,415
100
1,307,067
100
High CDR/High SLDDRf
222
58
227,000
77
62
40,836
92
1,021,537
78
High CDR/Low SLDDRg
12
3
4,000
1
52
329
1
18,791
1
Low CDR/Low SLDDRh
117
31
58,000
19
59
2,522
6
238,506
18
Low CDR/High SLDDRi
29
7
9,000
3
61
727
2
28,232
2
Public Less-Than-Two-Year
Sector Total
126
100
37,000
100
39
3,751
100
111,633
100
High CDR/High SLDDRf
77
61
20,000
54
37
2,640
70
49,357
44
High CDR/Low SLDDRg
7
6
10,000
28
36
659
18
38,143
34
Low CDR/Low SLDDRh
26
21
3,000
9
52
205
6
15,313
14
Low CDR/High SLDDRi
16
13
3,000
9
53
248
7
8,820
78
Private Nonprofit Less-Than-Two-Year
Sector Total
26
100
16,000
100
61
1,242
100
25,441
100
CRS-57

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Average
Dollars Borrowed by
Percentage of
All Borrowers
Undergraduates
Dollars Owed by Defaulters
(SLDDR
Receiving a Pell
(SLDDR Numerator; $ in
Denominator; $ in

IHEs
Student Enrollmenta
Grantb
thousands)c
thousands)d
CDR/SLDDR
Quadrante
#
%
#
%
%
$
%
$
%
High CDR/High SLDDRf
15
58
11,000
70
64
1,074
87
18,154
71
High CDR/Low SLDDRg
1
4
1,000
6
85
6
1
302
1
Low CDR/Low SLDDRh
8
31
3,000
16
44
54
4
4,115
16
Low CDR/High SLDDRi
2
8
1,000
8
50
108
9
2,870
11
Private For-Profit Less-Than-Two-Year
Sector Total
781
100
299,000
100
61
53,492
100
1,100,748
100
High CDR/High SLDDRf
514
66
234,000
78
63
49,359
92
862,962
78
High CDR/Low SLDDRg
7
1
1,000
0
60
82
0.2
4,301
0
Low CDR/Low SLDDRh
168
22
40,000
13
55
1,703
3
149,985
17
Low CDR/High SLDDRi
92
12
25,000
8
52
2,347
4
83,500
8
HBCUs
Total
90
100
314,000
100
61
50,678
100
1,996,440
100
High CDR/High SLDDRf
65
72
196,000
63
63
38,021
75
1,101,658
55
High CDR/Low SLDDRg
18
20
81,000
26
58
9,257
18
563,087
28
Low CDR/Low SLDDRh
7
8
37,000
12
57
3,399
7
331,695
17
Low CDR/High SLDDRi
–
0
–
0
–
–
0
–
0
Source: CRS analysis of U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default Rate for Schools, press package for FY2017,
https://fsapartners.ed.gov/sites/default/files/2021-09/FY2017PressPackage.xlsx; and U.S. Department of Education, National Center for Education Statistics, Integrated
Postsecondary Education Data System.
Notes: Details may not add to totals due to rounding.
a. Represents the 12-month unduplicated headcount of undergraduate and graduate students enrol ed for credit at an IHE at any point during AY2015-2016.
CRS-58

b. Excludes IHEs that reported zero individuals enrol ed as undergraduate students in AY2015-2016.
c. Represents the outstanding principal and interest balance three years after entering repayment for all CDR-relevant loans borrowed to attend a given IHE of
borrowers who entered repayment on their loans in FY2017 and defaulted on any of those loans within three years. CDR-relevant loans are those loans that were
considered in determining whether a borrower was included in the IHE’s CDR calculation and include Federal Family Education Loan program or Direct Loan
program Subsidized Loans or Unsubsidized Loans borrowed to attend the IHE.
d. Represents the outstanding principal and interest balance at the time of entry into repayment for all CDR-relevant loans borrowed to attend a given IHE of all
borrowers who entered repayment in FY2017, and multiplied by 100. CDR-relevant loans are those loans that were considered in determining whether a borrower
was included in the IHE’s CDR calculation and include Federal Family Education Loan program or Direct Loan program Subsidized Loans or Unsubsidized Loans
borrowed to attend the IHE.
e. The FY2017 student loan dol ar default rate (SLDDR) is the outstanding principal and interest balance three years after entering repayment for all CDR-relevant
loans borrowed to attend a given IHE of borrowers who entered repayment on their loans in FY2017 and defaulted on any of those loans within three years,
divided by the outstanding principal and interest balance at the time of entry into repayment for all CDR-relevant loans borrowed to attend a given IHE of all
borrowers who entered repayment in FY2017, multiplied by 100, and truncated to the tenth decimal place. CDR-relevant loans are those loans that were
considered in determining whether a borrower was included in the IHE’s CDR calculation and include Federal Family Education Loan program or Direct Loan
program Subsidized Loans or Unsubsidized Loans borrowed to attend the IHE.
f.
IHEs with CDRs that exceeded the median CDR of all IHEs (9%) and SLDDRs that exceeded the median SLDDR of all IHEs (2.1%).
g. IHEs with CDRs that exceeded the median CDR of all IHEs (9%) and SLDDRs that were equal to or lower than the median SLDDR of all IHEs (2.1%).
h. IHEs with CDRs that were equal to or lower than the median CDR of all IHEs (9%) and SLDDRs that were equal to or lower than the median SLDDR of all IHEs
(2.1%).
i.
IHEs with CDRs that were equal to or lower than the median CDR of all IHEs (9%) and SLDDRs that exceeded the median SLDDR of all IHEs (2.1%).

CRS-59

Cohort Default Rates and HEA Title IV Eligibility: Background and Analysis

Appendix B. Methodology for Examining Three
Options of Calculating CDRs by Institutional
Characteristics
In this report, CRS examined three methodologies to evaluate institutional performance, all of
which incorporate the current CDR metric: (1) the current CDR methodology, (2) the current
CDR methodology and incorporating institutional student loan borrower rates (SBRs), and (3) the
current CDR methodology and incorporating institutional student loan dollar default rates
(SLDDRs). In exploring institutional performance under these methodologies, CRS examined a
variety of institutional characteristics (e.g., sector, Pell Grant receipt).
To develop the universe of IHEs (and their characteristics) that were examined in this report, CRS
first selected IHEs with official CDRs issued for CFY2017 (4,796 IHEs) from the FY2017 ED
press package file of CDRs.245 Although more recent institutional CDRs (for CFY2018,
CFY2019, and CFY2020) are available, they are excluded from this analysis because they reflect
years in which the COVID-19 student loan payment pause was in effect, which made it
significantly less likely for most borrowers to default on their student loans. As such, those years’
CDRs are lower than they might otherwise have been in the absence of that policy and may not
provide sufficient insight into institutional performance under the CDR metric in more typical
circumstances.
CRS then appended onto the list of IHEs selected institutional characteristics obtained from ED’s
Integrated Postsecondary Education Data System (IPEDS). IPEDS is a series of surveys annually
conducted by ED to gather institutional data on a variety of topics from Title IV participating
IHEs. For this analysis, CRS selected the reported IPEDS data that most closely aligned with the
final year (described below) in which a student loan borrower captured by the CFY2017 CDR
most likely would have been enrolled. Aligning the data in this way provides a sense of an
institution’s characteristics when the borrower most likely was enrolled, thus potentially
reflecting the borrower’s educational experience that may have contributed to whether or not they
defaulted on their student loan within the three-year CDR timeframe.
The CFY2017 CDR measures the proportion of students who entered repayment in FY2017
(October 1, 2016-September 30, 2017) and defaulted in FY2017, FY2018, or FY2019. Borrowers
of Subsidized Loans and Unsubsidized Loans do not enter repayment on their loans while they
are enrolled in an eligible educational program on at least a half-time basis and during a six-
month grace period following their graduation, cessation of enrollment, or enrollment below half-
time status. For purposes of this analysis, CRS assumed that borrowers entered repayment at the
beginning of FY2017 and immediately after a six-month grace period, resulting in borrowers
having been enrolled in an institution around April 2016. Many IPEDS data are reported based on
the academic year (July 1-June 30); thus, data selected by CRS for this analysis reflects
institutional characteristics for AY2015-2016 (July 1, 2015-June 30, 2016), which includes April
2016. When IPEDS variables that reflect AY2015-2016 were unavailable, CRS used available
variables closest to AY2015-2016 that reflected a time period before April 2016. The appended
institutional characteristics were the following:

245 U.S. Department of Education, Office of Federal Student Aid, Official Cohort Default Rate for Schools, press
package for FY2017, https://fsapartners.ed.gov/sites/default/files/2021-09/FY2017PressPackage.xlsx.
Congressional Research Service

60

Cohort Default Rates and HEA Title IV Eligibility: Background and Analysis

• Institutional sector for AY2015-2016. This variable divides the universe of
IHEs according to control (e.g., public, private not-for-profit, private for-profit)
and level (e.g., two-year, four-year and higher).
• Status as a Historically Black College or University (HBCU) for AY2015-
2016. This variable indicates whether an institution was classified as an HBCU in
AY2015-2016.
• Percentage of undergraduate students who received a Pell Grant in AY2015-
2016.246 CRS divided the number of undergraduate students awarded a Pell Grant
at all institutions within a relevant category (e.g., public two-year institution,
HBCU) by the number of all undergraduate students enrolled at IHEs within that
category.
• 12-month unduplicated headcount for AY2015-2016. This variable represents
the total unduplicated headcount of undergraduate and graduate students enrolled
for credit at an IHE at any point during AY2015-2016.
CRS next appended onto the list ED-provided data on (1) the total number of graduate and
undergraduate students247 who borrowed a Direct Subsidized Loan, Unsubsidized Loan, or
Graduate PLUS Loan to attend the relevant IHE in AY2015-2016, (2) the outstanding principal
and interest balance for all CDR-relevant loans248 for all borrowers included in an IHE’s CDR
numerator for CFY2017249; and (3) the outstanding principal and interest balance for all CDR-
relevant loans for all borrowers included in an IHE’s CDR denominator for CFY2017.250
CRS then calculated each IHE’s SBR and SLDDR. To calculate each SBR, CRS divided the ED-
provided total number of graduate and undergraduate students who borrowed a Direct Loan to
attend the IHE in AY2015-2016 (July 1, 2015-June 30, 2016) by the IPEDS 12-month
unduplicated headcount for AY2015-2016 and multiplied the result by 100. To calculate the
SLDDR, CRS divided the ED-provided outstanding principal and interest balances three years
after entering repayment for all CDR-relevant loans of borrowers who entered repayment on
those loans in FY2017 and defaulted on any of those loans within three years by the ED-provided
outstanding principal and interest balances at the time of entry into repayment for all CDR-
relevant loans for all borrowers who entered repayment in FY2017 and multiplied the result by
100. For each measure, CRS truncated the final results to the tenth decimal place to align with
how CDRs are calculated.
Finally, from this list of 4,796 IHEs with CFY2017 CDRs, CRS excluded the following:

246 For purposes of this variable, schools may be considered academic reporters or program reporters. For academic
reporters, an academic year generally spans September to June, and such schools report on students who were enrolled
as of October 15, or the institution’s official reporting data. For program reporters, an academic year generally spans
July 1-June 30, and such schools report on students who were enrolled any time during the academic year.
247 Borrowers of PLUS Loans to parents of dependent undergraduate students were not included.
248 CDR-relevant loans are those loans that are considered in determining whether a borrower is included in an IHE’s
CDR calculation. These include FFEL program or Direct Loan program Subsidized Loans or Unsubsidized Loans
borrowed to attend the IHE.
249 Principal balance is the sum of borrowers’ principal balances. Interest balance is the sum of borrowers’ outstanding
interest that accrued on their loans since they entered repayment. Both principal and interest balances are as of the date
ED calculated such balances for CDR purposes, which was August 8, 2020, for CFY2017.
250 Principal balance is the sum of all borrowers’ principal balances. Interest balance is the sum of all borrowers’
outstanding interest that accrued on their loans between the date they entered repayment and the date of recordation in
ED’s loan history tables. Both principal and interest balances are special tabulations provided to CRS by ED and are as
of the date that balances were recorded in ED’s loan history tables in its National Student Loan Data System and
closest to the date on which a borrower’s loans entered repayment in FY2017.
Congressional Research Service

61

Cohort Default Rates and HEA Title IV Eligibility: Background and Analysis

• foreign IHEs (344),251
• IHEs without reported IPEDS data or with incomplete IPEDS data needed for the
analysis (11),252
• IHEs with an IPEDS-reported sector of “unknown” or “n/a” (17),
• IHEs for which ED-reported borrower counts exceeded IPEDS-reported
enrollment (34), and
• IHEs for which ED did not provide the total number of graduate and
undergraduate students who borrowed a Direct Loan to attend the relevant IHE in
AY2015-2016 as of August 30, 2023 (17).
This resulted in a total of 4,373 IHEs.

251 Foreign IHEs do not report data to IPEDS.
252 An IHE may have a CDR for CFY2017 but may not have reported IPEDS data for the specified time frames for a
few reasons, including, for example, that the institution (1) closed or otherwise ceased participating in the Title IV
programs prior to the IPEDS reporting timeline or (2) underwent a change in control (e.g., the school was a branch
campus of a Title IV-participating IHE and became a separate new IHE) that resulted in its having another IHE’s CDR
imputed to it f