JB Pritzker, Governor, State of Illinois

Cohort Default Rates

A cohort default rate is defined as the percentage of a lender’s portfolio whose student borrowers enter repayment on Federal Family Education Loan Program (FFELP) loans during a specific fiscal year and who default on those loans during the same or the following fiscal year.  Cohort default rates are calculated for originating lenders and subsequent holders on the basis of their respective Lender Identification Numbers (LID).

Loans made under a Lender-of–Last-Resort program, Federal PLUS loans, and Federally Insured Student loans are not used in the calculation. 

Cohort Default Rate (CDR) Formula:

Number of students who entered repayment on their loans in the specified fiscal year and defaulted within the same fiscal year or the subsequent fiscal year (Numerator)   ÷   Number of students who entered repayment on their loans in the specified fiscal year (Denominator)  X 100  = CDR 


A lender has 200 students with loans entering repayment in FY 2005 (October 1, 2004 - September 30, 2005) – the denominator.  Of those 200 students, 12 defaulted on their student loans in FY 2005 or FY 2006 (October 1, 2005 - September 30, 2006) and had default claims paid by the guaranty agency – the numerator.  This lender’s FY 2005 cohort default rate calculation is:

 12 ÷ 200 x100 = 6.0 percent

Appealing the CDR

A lender or holder may wish to appeal its cohort default rate if it identifies discrepancies in the data used to calculate its rate.  Information about the appeal process for a lender’s cohort default rate can be accessed through the Common Manual.