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Default Rates

Cohort Default Rates

Federal student loan borrowers generally have to begin repaying their loans six months after graduating, leaving school, or dropping below half-time enrollment. If borrowers make no payments for any period of 270 days, or roughly 9 months, they will default on their student loans. 

The U.S. Department of Education tracks the number and percentage of federal student loan borrowers who default on their student loans within three years of entering repayment. This is the Cohort Default Rate, commonly referred to as CDR.

The Department of Education releases official cohort default rates for each school that is eligible to participate in the federal student loan program once per year. The current rates (FY 2020) were released in September 2023 and the FY 2021 rates should be released in September 2024.

What does the default rate mean?

A student is considered to be in default on a student loan if they have not made a payment in more than 270 days. The official student loan default rate for a school is calculated by measuring how many students are in default three years after graduation. Note that the default rate only takes into account federal loans, not private.

Grayson College Default Rate

According to, loan default rates can serve students as an indicator for college affordability. The Fiscal Year 2020’s 3-Year Cohort Default Rate (CDR) for Grayson College is 0.0%. This includes 374 borrowers in repayment during the 2020 Fiscal Year. Those students were tracked over a three year period and none of them defaulted on their student loans.

The Department of Education does not have the national FY 2020 3-year CDR published, so for comparison, GC’s FY 2019 3-year CDR was 4.5%. This included 22 defaulted borrowers out of 486 in repayment. The national 3-year CDR for FY 2019 was 2.3%.

With the pause of student loan repayments, there is a nationwide decrease in the 3-year CDR since borrowers are not required to make payment

Cohort Fiscal Year Official Default Rate Number of Borrowers in Default Number of Borrowers in Repayment
2020 0.0% 0 374
2019 4.5% 22 486
2018 11.9% 66 553
2017 19.6% 133 678

Consequences of Default

The consequences of defaulting can not only impact your ability to borrow but can impact your finances as well. Consequences may include the following:

  • The entire unpaid balance of your loan and any interest you owe becomes immediately due
  • Your loans may be turned over to a collection agency
  • You can be sued for the entire amount of your loan
  • You will be liable for the costs associated with collecting your loan, including costs and attorney fees
  • Your wages may be garnished
  • Your federal and state income tax refunds may be taken for treasury offset
  • The federal government may withhold part of your Social Security benefit payments
  • Your defaulted loans will appear on your credit history for up to 7 years after the default claim is paid
  • It may take years to reestablish a good credit record
  • You may not be able to purchase or sell assets, such as real estate
  • You will not receive additional federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time, monthly payments
  • You may be ineligible for assistance under most federal benefits programs
  • You can no longer receive deferment or forbearance, and you lose eligibility for other loan repayment benefits, such as the ability to choose a specific repayment plan
  • Subsidized interest benefits will be denied
  • You may not be able to renew a professional licenses
  • You may be prohibited from enlisting in the Armed Forces
  • Your school may withhold your academic transcript until your defaulted student loan is satisfied. The academic transcript is the property of the school, and it is the school's decision - not the US Department of Education's or your loan holder's - whether to release the transcript to you


Last Modified: Nov 6, 2023 2:41:13 PM