Cohort Default Rate

About the Cohort Default Rate

Federal student loan borrowers generally have to begin repaying their loans six months after graduating, leaving school, or dropping below half-time enrollment. If borrowers make no payments for any period of 270 days, or roughly 9 months, they will default on their student loans. 

The U.S. Department of Education (Dept) tracks the number and percentage of federal student loan borrowers who default on their student loans within three years of entering repayment. This is the Cohort Default Rate, commonly referred to as “three-year” CDRs.

The Department of Education releases official cohort default rates for each school that is eligible to participate in the federal student loan program once per year. The current rates (FY 2021) were released in September 2024 and the FY 2022 rates should be released in September 2025.  The national cohort default rate average and Arkansas Tech's cohort default rate is currently 0% due to the moratorium on student loan payments and interest charges that was in effect until August 31, 2023.  

Helpful Definitions for Deciphering the CDR

Cohort Default Period

The three-year period that begins on October 1st of the fiscal year when the borrower enters repayment and ends on September 30th of the second fiscal year following the year in which the borrower entered repayment. This is the period during which a borrower’s default affects the school’s cohort default rate.

Cohort Default Rate (CDR)

The percentage of a school's borrowers who enter repayment on federal student loans during a federal fiscal year (October 1 to September 30) and default within the cohort default period.

Cohort Fiscal ear or Cohort Year

The fiscal year for which the cohort default rate is calculated. For example, when calculating the 2021 cohort default rate, the cohort fiscal year is FY 2021 (October 1, 2020 to September 30, 2021).

Default

Failure to repay a debt. Loans must be repaid.  Making no payments on student loans, that are in repayment status, for 270 days will cause loans to go in a default status. Defaulting on student loans is very detrimental to your credit.

Federal Fiscal Year

October 1 to September 30 - Cohort default rates are based on federal fiscal years. Federal fiscal years begin October 1st of a calendar year and end on September 30th of the following calendar year. Each federal fiscal year refers to the calendar year in which it ends.

Treasury Offset

When your federal and state income tax refunds are intercepted and applied toward the repayment of your defaulted loan.

Wage Garnishment

When your employer is required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan.

ARKANSAS TECH UNIVERSITY'S THREE-YEAR OFFICIAL COHORT DEFAULT RATES¹

FISCAL YEAR	2021	2020	2019
Default rate	0%	0%	1.6%
Number in default	0	0	40
Number in repayment	2,371	2,333	2,455

consequences of default

 

The consequences of defaulting can not only impact your ability to borrow but can impact your finances as well. Consequences may include the following:

• The entire unpaid balance of your loan and any interest you owe becomes immediately due.
• Your loans may be turned over to a collection agency.
• You can be sued for the entire amount of your loan.
• You will be liable for the costs associated with collecting your loan, including costs and attorney fees
• Your wages may be garnished.
• Your federal and state income tax refunds may be taken for treasury offset.
• The federal government may withhold part of your Social Security benefit payments.
• Your defaulted loans will appear on your credit history for up to 7 years after the default claim is paid.
• It make take years to reestablish a good credit record.
• You may not be able to purchase or sell assets, such as real estate.
• You will not receive additional federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time, monthly payments. 
• You may be ineligible for assistance under most federal benefits programs.
• You can no longer receive deferment or forbearance, and you lose eligibility for other loan repayment benefits, such as the ability to choose a specific repayment plan.
• Subsidized interest benefits will be denied.
• You may not be able to renew a professional licenses.
• You may be prohibited from enlisting in the Armed Forces.
• Your school may withhold your academic transcript until your defaulted student loan is satisfied. The academic transcript is the property of the school, and it is the school's decision - not the US Department of Education's or your loan holder's - whether to release the transcript to you.
• YOU WILL STILL OWE THE FULL AMOUNT OF YOUR LOAN.

 

_{¹Federal Student Aid Default Management}