COHORT REGULATORY

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COHORT REGULATORY

• COHEAO Mid-Year
• Philadelphia, PA
• 8/3/2009
• Presented by
• Sharon Cameron, Campus Partners
• Terry Kell, University of Wisconsin-Madison

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Contact Information

• Sharon Cameron, Audit Compliance Specialist,
  Campus Partners
• Phone [phone] X 2060
• scameron_at_campusparters.com

• Terry L. Kell, Assistant Director, Student
  Financial Services at University of
  Wisconsin-Madison
• Phone [phone]
• Terry.Kell_at_finaid.wisc.edu

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34CFR 674.5

• Penalties
• If cohort default rate equals or exceed
• 25, FCC is reduced to zero
• - If cohort default rate equals or exceeds 50
  for each of the most recent 3 years, not eligible
  to participate in the Perkins program.

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Cohort Denominator

• Borrowers who enter repayment in that award year
  who default before the end of the following award
  year.
• Denominator is a moving target.
• Changing throughout the year based on
• Grace deferments - 674.38(c)
• Borrowers that pay loan in full during the
• grace period

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Cohort Numerator

• Borrowers whose loans are
• 240 consecutive days past due monthly
• 270 consecutive days past due quarterly
• Note A loan is also considered default if the
  school, its owner, agency, contractor, employee
  or any other agency makes payment on the loan in
  order to avoid default.

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Exclusions from default rate

• Voluntarily make 6 consecutive monthly payments
• Voluntarily make all payments currently due
• Pay the full amount due including interest, late
  fees, and collection cost
• Process deferment/forbearance that brings the
  loan below 240/270 days past due

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Exclusions (contd)

• Rehabilitated the loan (now 9 consecutive
  payments)
• Discharged due to death or permanent and total
  disability
• Discharged in bankruptcy
• Discharged due to closed school
• Pay the loan in full
• Assigned to and conditionally discharged for TPD.

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Exclusions (contd)

• Payment of funds obtained by income tax offset,
  garnishment, income of asset execution, or
  pursuant to a judgment are not considered
  voluntary.