Cohort Default Rate No More?
Katherine Knott
March 7, 2023
A nearly three-year payment pause and forthcoming changes to income-driven repayment mean that fewer student borrowers will likely default on their loans. Here’s what that means for accountability.
The Biden administration’s planned changes to how student borrowers can repay their loans likely mean that fewer students will default on their debts—rendering a long-standing student debt and accountability measure more meaningless than it already is, experts say.
The cohort default rate “was already very toothless even before we got to this current juncture,” said Brian Denten, an officer with Pew Charitable Trusts’ project on student borrower success.
Higher education experts and think tank analysts have called on the department in the last few years to revise the cohort default rate, which measures the percentage of borrowers at an institution who have defaulted over a three-year period and can lead to institutions losing access to federal financial aid. The nearly three-year pause on student loan payments, several experts argued, provided an opportunity to introduce new accountability measures as part of a broader rethinking on how to hold colleges and universities accountable. The recently proposed changes to income-driven repayment have intensified those calls.
