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April 12, 2012  |  Follow Us   @inceptia LinkedIn  

Understanding the new cohort default rate.



The writing is on the wall. Higher education institutions are being held more and more accountable for student loan repayment. Along with that, the cohort default rate calculation has been increased from two years to three years. Through our analysis, we’ve discovered that the new timeframe could increase a school’s default rate significantly. For instance, a school with a 10-percent, two-year default rate could expect its three-year rate to increase to 16 percent. Even schools with low and impressive two-year default rates may see a 70 percent increase with the three-year calculation.

We believe that schools can help their students succeed in avoiding default and remain in good financial standing by implementing a preventive plan. By working with schools to reach a customized repayment success plan, schools can react to the changing regulations in a proactive, rather than reactive, fashion. The earlier schools address default rates, the more options they will have in avoiding government penalties. We’ll not only assist schools to help them lower their default rate, but we’ll also work toward moving their students closer to repayment success.

As Inceptia, we work with schools and provide the guidance, tools and resources they need to help their students reach financial well-being. Ultimately, we want all students, not just borrowers, to become financially responsible adults.

To read more about the change in default rate calculations and learn how your school can reach repayment success, read our white paper "Minimizing Your School’s Risk of Exposure: Understanding Your Three-Year Cohort Rate."
Read our Whitepaper
You can also learn about the hidden impact of student loan default on colleges and universities by viewing our University Business Web seminar, "The Real Price of Student Loan Default." The recording is available here.
Go to the Webinar


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