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Historically Black Colleges and Universities

Fact Sheet
FY 2016 Cohort Default Rates
September 2019

Section 435(a)(2) of the Higher Education Act of 1965, as amended (the HEA) provides that institutions lose eligibility to participate in the Federal Direct Loan and Federal Pell Grant programs when the institution’s federal student loan Cohort Default Rate exceeds 30 percent for each of the three most recently completed federal fiscal years beginning with federal fiscal year 2016. Under Section 435(a)(7) of the HEA, an institution that has a Cohort Default Rate of 30 percent or greater for any one federal fiscal year is required to establish a Default Prevention Task Force to reduce defaults and prevent the loss of institutional eligibility.

As of September 2019, all 100 eligible HBCUs have official FY 2016 cohort default rates that fall below regulatory thresholds. For the FY 2016 official CDR cycle, only one HBCU is subject to cohort default rate sanctions or the consequent loss of Title IV student financial assistance program eligibility.

HBCUs have deployed innovative approaches towards default management and reduction. Such strategies include implementation of a default management plan that engages stakeholders, identifies approaches to reducing default rates, and tracks measurable goals. These schools have increased borrower awareness of obligations through incorporating borrower topics at orientation sessions and providing enhanced entrance and exit counseling. Other best practices include borrower tracking, increased contact with delinquent borrowers, taking advantage of the cohort default rate challenge/adjustment/appeal processes, and partnering with other stakeholders to optimize default prevention, resolution, and reduction.

HBCUs, TCCs, and Navajo Community Colleges are encouraged to continue to use an acceptable default management plan (such as found in Appendix B to 34 CFR 668 Subpart N).

Questions regarding the Title IV student financial assistance program eligibility status of these schools or other HBCUs should be forwarded to:

U.S. Department of Education
Federal Student Aid
Operations Performance Division
(202) 377-4259

Last updated February 12, 2020

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