Consistent with the new rules, an institution’s CDR is the percentage of the institution’s former students who entered repayment on a FFEL/Direct Loan during the relevant cohort year who defaulted before the end of the second fiscal year following the cohort year. This represents a one-year extension of the current default monitoring period. The FY 2009 cohort (borrowers who entered repayment between October 1, 2008 and September 30, 2009) is the first cohort that will be monitored for the additional year. Thus, an institution’s FY 2009 three-year CDR will be the percentage of its borrowers who were included in the 2009 cohort who subsequently default on or before September 30, 2011. Draft FY 2009 three-year CDRs will be provided to institutions in February 2012 with official rates released in September 2012.
Since the HEOA provided that any sanctions that would result from the new three-year CDRs would not be effective until there were three sets of official three-year rates, the Department will continue to calculate and publish official two-year CDRs until three sets of three-year rates are published. The last two-year rate calculation will be for the FY 2011 cohort and will be released in 2013. Beginning in 2014, only three-year rates will be published since at that time three sets of three-year rates will have been calculated (FY 2009 published in 2012, FY 2010 published in 2013, and FY 2011 published in 2014)