For Institutions



For Institutions

Is your Institution at RISK of losing eligibility for Federal Funding due to poor Cohort Default ratings??? American Student Loan Advocates is the Default Taskforce you need on your side!!

Our Goal: To assist educational institutions in dramatically lowering and preventing surges in their borrower default.

How We Do It: We have a staff of well trained, caring and aggressive Advocates that are focused on doing everything possible to work with your Defaulted borrowers. We aggressively and appropriately connect with your borrowers and educate them on the various ways to move from defaulted status into either Current Status or into Rehabilitation. Each borrower is different so we customize a solution based on his or her own long term goals and needs which will also aligns with the bottom line for the Institution.. GET THAT DEFAULT RATE DOWN!

Results: Though concrete results can never be guaranteed, American Student Loan Advocates has an outstanding track record in Default Prevention and Borrower Enrollment into Federal Repayment Programs. Whether you have 25 Defaulted borrower or 2500, we focus our efforts in connecting with each and every borrower until we reach a long-term solution. Due to Department of Education turn-around times, your institution you could see dramatic Default Borrowers drop off within 90 days of initiation of the American Student Loan Advocates Default Task Force Services.


Cohort Default Rates

34 CFR §668.217 Institutions that have a 3-Year 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


Cohort Default Rate Q&A

  • Q. What is a 3-year cohort default rate (CDR)?
  • A. If your school has 30 or more borrowers entering repayment in a fiscal year your school’s cohort default rate is the percentage of your school’s borrowers who enter repayment on Federal Direct Loans. American Student Loan Advocates works specifically to keep your Cohort Default Rate under the 30%
  • Q. Why are cohort default rates important?
  • A. Defaulted federal student loans cost taxpayers money. By calculating cohort default rates, sanctioning schools with higher rates, and providing benefits to schools with lower rates, the Department creates an incentive for schools to work with borrowers to reduce defaults. As a result, cohort default rates help save taxpayers money.
  • Q. How does the 3-year cohort default rate affect my school if my school has less than 30 borrowers entering repayment?
  • A. If your school has less than 30 borrowers entering repayment, and has data from the previous two cohort years, then an average rate will be calculated for your school, and this average rate will be your school’s official cohort default rate used to determine eligibility for all relevant cohort default rate sanctions/benefits. Regardless of the number of borrowers in repayment, American Student Loan Advocates works aggressively to keep your Cohort Default rate under the 30% so your institution keeps receiving Federal Aid benefits.
  • Q. Which types of loans are included in the cohort default rate calculation?
  • A. Cohort default rates include William D. Ford Federal Direct Loan (Direct Loan) Program loans and Federal Family Education Loan (FFEL) Program loans. While the FFEL Program has been eliminated there may still be FFEL loans included in the cohort default rate calculation.
  • Q. The type of FFEL and Direct Loans included in the cohort default rate calculation are:
  • A. 1.) Subsidized FFEL and Unsubsidized FFEL (collectively referred to as FFEL) and 2.) Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans (collectively referred to as Direct Loans).
  • Q. If a student’s loan is in deferment or forbearance status, will they be included in our school’s cohort default rate?
  • A. A borrower who enters repayment but subsequently receives a deferment or forbearance will be counted in the denominator of the cohort default rate based on the original date entered repayment. If the borrower defaults during the cohort default period, that borrower would be counted in the numerator as well.
  • Q. My school has a 3-year cohort default rate of 30 percent or greater. Will this affect my school?
  • A. Yes, if your school has 30 or more borrowers, and has a 3-year cohort default rate that is equal to or greater than 30 percent it must establish a default prevention task force. This task force must prepare a plan to identify the factors causing the school’s cohort default rate to exceed 30 percent and submit to the Department for review. In addition, schools with cohort default rates of 30 percent or greater for two consecutive years will have to revise their plans to implement additional procedures and also could be subject to provisional certification. American Student Loan Advocates fills in any gaps in your institution’s Default Prevention Action Plan.

7 Steps To Creating A Successful Default Aversion Taskforce

Lowering your school’s Cohort Default Rate (CDR) begins with a Default Prevention Management Plan. Developing your plan can be a significant undertaking; however, with our added expertise and by following the steps outlined below, we can help you create a plan that meets your institution’s specific goals and needs.

Step One: Perform a Cohort Analysis

  • Target your default prevention efforts - Detail which of your borrowers are at a higher risk of defaulting.
    • What are some of the characteristics of these students? Did they withdraw before finishing their degree program? Are they enrolling late? Are they focused in specific academic programs? The more data you can gather, the more accurate your analysis will be.

Step Two: Get People Involved

  • All schools that want to lower their Cohort Default Rate should assemble a default prevention task force.
  • Start with members of your campus community who understand that default prevention is the responsibility of the whole campus, not just the Financial Aid office. After you have a few members who understand the school’s default prevention obligations, you can work to educate others on campus and get them on board. Seeking individuals from Financial Aid, Admissions, Academic Advising, Student Life, Academic Affairs, Retention, the Registrar’s office, the Provost’s office, faculty, IT, Institutional Research and the student body is a good place to start.
  • Partner with American Student Loan Advocates to take over Grace Counseling and Default/Delinquency resolution.

Step Three: Identify Existing Efforts

  • What are you currently doing campus-wide that applies or can be easily adapted to default prevention?
  • Loan counseling, financial literacy, student retention efforts are some common examples of activities that many campuses already employ.
  • Compare this list of activities to the data from your cohort analysis. Are you reaching the borrowers who need this information the most?
  • Where is your institution directing funds that can otherwise be saved by utilizing American Student Loan Advocates

Step Four: Determine Who You Will Target First

  • Determine who you’ll want your efforts to target. Does it make more sense to target current students? Students in their grace period or repayment?
  • From which cohort year will you work and how many days delinquent will be the focus of your plan?

Step Five: Reaching your Defaulted Borrowers

  • Do you have enough staff or time to complete this work or will you hire a third-party to help?
  • Will you send letter, email or call? Will you initiate a call campaign for delinquent students?
  • You may need to consider different approaches for current and grace students than the ones you use to reach borrowers in repayment.
  • Remember, you can’t help borrowers you can’t reach. We can help you put together a plan for maintaining good contact information on your students.

Step Six: Create Measurable Goals

  • Track your progress by creating measurable goals. To ensure everyone on the task force is clear about the goals and in the interest of getting buy-in, it’s critical that your task force work together during this step.
  • Many goals will be tied to a specific number or percentage. For example, indicating that you will successfully contact a certain percentage of your delinquent borrowers by telephone, text or email
  • Not all goals require a specific number or measurement. Your goals can include “yes/no” statements. This might be appropriate if you're introducing a new initiative or adding a step to your loan counseling process. For example, if you wanted to incorporate in-person loan counseling as a part of your SAP Academic Plans, you could simply include that in your list of goals.

Step Seven: Review Your Plan

  • Your committee should review your plan at least once per year.
  • It might be appropriate to review portions of your plan on a cyclical basis. For example, you might review your loan counseling goals a few weeks after the start of a term, when most borrowers will have completed loan counseling.
  • Use this time to analyze what worked and what didn’t, and identify ways to tweak your plan to make it more successful.

Call TODAY to speak to our Default Aversion Task Force (844) 499-5626 or email - DefaultTaskForce@americanSLA.org