Table of Contents

Introduction...........................................................................1

General Information .............................................................3

Cohort Default Rates.....................................................................3

Definition of Cohort Default Rates .....................................3

Cohort Default Rate Types .................................................3
Loans Included in the Cohort Default Rate ......................4
Release of Cohort Default Rates .......................................5
Calculating the Cohort Default Rate ..................................7
Time Frames of a Cohort Period.......................................13
Loans Included in the Denominator..................................15
Loans Included in the Numerator......................................16
Special Circumstances .......................................................18
Affect of Adding/Subtracting Loans to/from Cohort
Default Rate Calculation.........................................24

Effects of Official Cohort Default Rates..................................25

Definition of Sanctions ........................................................25

Definition of Benefits ..........................................................25
Types of Cohort Default Rate Sanctions .........................25
Consequences of Cohort Default Rate Sanctions..........27
Exceptions to Cohort Default Rate Sanctions.................31
Types of Cohort Default Rates Benefits ..........................32

Loan Record Detail Report .........................................................35

Definition of a Loan Record Detail Report.......................35

Reviewing a Loan Record Detail Report..........................39
Title Section of Loan Record Detail Report.....................39
Body Section of Loan Record Detail Report ...................41
Summary Section of Loan Record Detail Report ...........48
Sample Loan Record Detail Report..................................51
Request for Loan Record Detail Report...........................53

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Information for Schools on Appeals ................................55

At-A-Glance Information - Appeal Tips ...................................55

Appeal Eligibility Chart……................................................58

Request for Adjustment Time Frame Overview..............60
Erroneous Data Appeal Time Frame Overview..............61
Improper Loan Servicing and Collection Appeal
Time Frame Overview.............................................62
Exceptional Mitigating Circumstances Appeal
Time Frame Overview.............................................63

Request for Adjustment...............................................................65

Definition of a Request for Adjustment ............................65

Qualifying ..............................................................................65
Timing and Submitting ........................................................67
Sample Request for Adjustment Cover Letter................73
Instructions for Request for Adjustment Spreadsheet...74
Sample Request for Adjustment Spreadsheet................75

Erroneous Data Appeal ...............................................................77

Definition of an Erroneous Data Appeal ..........................77

Qualifying ..............................................................................77
Timing and Submitting ........................................................90
Sample Erroneous Data Request Cover Letter ..............103
Instructions for Erroneous Data Request Spreadsheet.104
Sample Erroneous Data Request Spreadsheet .............105
Sample Erroneous Data Appeal Cover Letter ................107
Instructions for Erroneous Data Appeal Spreadsheet...108
Sample Erroneous Data Appeal Spreadsheet................109

Improper Loan Servicing and Collection Appeal..................111

Definition of an Improper Loan Servicing and

Collection Appeal.....................................................111
Qualifying ..............................................................................111
Timing and Submitting ........................................................127

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Information for Schools on Appeals (continued)

Improper Loan Servicing and Collection Appeal (continued)

Sample Request for Loan Servicing Records

Cover Letter..............................................................135
Sample Improper Loan Servicing and Collection
Appeal Cover Letter..................................................137
Instructions for Improper Loan Servicing and
Collection Appeal Spreadsheet.............................138
Sample Improper Loan Servicing and Collection
Appeal Spreadsheet................................................139

Exceptional Mitigating Circumstances Appeal.....................141

General Information..........................................................141

Types of Exceptional Mitigating

Circumstances Appeals ..............................141
Benefits of Exceptional Mitigating
Circumstances Appeals ..............................144
Period of Time Associated With Exceptional
Mitigating Circumstances Appeals............146

Participation Rate Index Appeal....................................151

Definition of Participation Rate Index...................151

Qualifying ..................................................................151
Timing and Submitting ............................................156
Sample Participation Rate Index Appeal
Cover Letter..................................................163
Instructions for Participation Rate Index
Appeal Spreadsheet....................................164
Sample Participation Rate Index Appeal
Spreadsheet.................................................165

Economically Disadvantaged and Placement Rate

Appeal ......................................................................167

Definition of Economically Disadvantaged Rate.167

Definition of Placement Rate .................................167
Qualifying ..................................................................168
Timing and Submitting ............................................179

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Information for Schools on Appeals (continued)

Exceptional Mitigating Circumstances Appeal (continued)

Economically Disadvantaged and Placement Rate

Appeal (continued)

Sample Notice of Intent to file Economically

Disadvantaged and Placement Rate
Appeal Cover Letter ....................................191
Sample Economically Disadvantaged and
Placement Rate Appeal Cover Letter.......193
Instructions for Economically Disadvantaged
Rate Spreadsheet........................................194
Sample Economically Disadvantaged Rate
Spreadsheet.................................................195
Instructions for Placement Rate Spreadsheet....196
Sample Placement Rate Spreadsheet.................197
Sample Independent Auditor’s Attestation..........199

Economically Disadvantaged and Completion Rate

Appeal ......................................................................201

Definition of Economically Disadvantaged Rate.201

Definition of Completion Rate ................................201
Qualifying ..................................................................202
Timing and Submitting ............................................212
Sample Notice of Intent to file Economically
Disadvantaged and Completion Rate
Appeal Cover Letter ....................................227
Sample Economically Disadvantaged and
Completion Rate Appeal Cover Letter .....229
Instructions for Economically Disadvantaged
Rate Spreadsheet........................................230
Sample Economically Disadvantaged Rate
Spreadsheet.................................................231
Instructions for Completion Rate Spreadsheet...232
Sample Completion Rate Spreadsheet................233
Sample Independent Auditor’s Attestation..........235

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Information for Schools on Appeals (continued)

Withdrawing An Appeal...............................................................237

General Information.............................................................237
Timing and Submitting ........................................................237
Sample Withdrawing an Appeal Letter.............................241

Information for Guaranty Agencies on Appeals.............243

General Information......................................................................243

Monthly Status Reports...............................................................247

Instructions for Monthly Status Report Spreadsheet.....250

Sample Monthly Status Report Spreadsheet..................251

Request for Adjustment...............................................................253

Exceptional Mitigating Circumstances Appeal.....................253

Erroneous Data Response .........................................................255

Responding ..........................................................................255
Sample Erroneous Data Response Letter.......................267
Instructions for Erroneous Data Response
Spreadsheet.............................................................268
Sample Erroneous Data Response Spreadsheet..........269

Loan Servicing Records Response .........................................271

Responding ..........................................................................271
Sample Loan Servicing Records Response Letter........281

Appendices
Appendix A - Guaranty Agency Contacts...............................1

Appendix A1 - Numerical Listing .......................................3

Appendix A2 - Alphabetic Listing ......................................15

Appendix B - Direct Loan Servicer Contact ...........................1

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Appendices (continued)
Appendix C - U.S. Department of Education Contacts .......1

Appendix D - Standard Terms....................................................1

Appendix E - User Comments on the Guide..........................1

Page vi FY 1997 Official Cohort Default Rate Guide