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PublicationDate: 7/1/99
BulletinID: DLB - 99 - 44

July 1999

DLB-99-44


Subject: Cohort Default Rate Loan Record Detail Reports

Dear Partner:

The Department provided schools with draft FY 1997 cohort default rate data in late March/early April 1999. Many schools may have noticed that some defaulted Direct Loan Program loans were listed in the cohort default rate loan record detail reports with what appeared to be conflicting information. Some Direct Loan Program loans were listed on the report with a “loan status code” of “RP,” which indicates that a loan is in repayment, and a “claim reason code” of “IX,” which indicates that the loan has defaulted. The Department received numerous inquiries regarding how a loan could be in repayment and in default at the same time. The Department has researched this issue and has determined that a lag time in submitting updated information to the National Student Loan Data System (NSLDS) caused the apparent inconsistency.

The Department’s research has indicated that the loans that appeared with a “loan status code” of “RP” and a “claim reason code” of “IX” were correctly reported to NSLDS as defaulted loans. Unfortunately, the “loan status code” was not updated to reflect the recent default, as identified by the “claim reason code,” prior to the calculation of the draft FY 1997 cohort default rates. The Department has identified a process that will work to ensure that the “loan status code” is updated with the most recent information prior to the calculation of the official FY 1997 cohort default rates.

If you have any questions about your school’s cohort default rate data or the cohort default rate loan record detail report, please contact the Default Management Division at (202)708-9396 or via email at OSFA_IPOS_Default_Management_Division@ed.gov.

Thank you for your continued partnership in the Direct Loan Program.

Sincerely,



Margaret E. White
Chair
Direct Loan Task Force

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