How to Read a College's Loan Default and Repayment Rates

A college’s cohort default rate is the share of its federal student-loan borrowers who entered repayment in one year and defaulted within about three. It is the one loan figure the Department of Education calculates for every college, every year, and it sits on every TuitionScan college page beside the net price. Read on its own it is easy to misread, in three specific ways.

What the cohort is

The rate is built from a cohort: every borrower whose Direct or FFEL loans entered repayment during one federal fiscal year, which runs from October 1 to September 30. Federal Student Aid then counts how many of them defaulted by the end of the second fiscal year after that. The FY2022 cohort, for example, is borrowers who entered repayment between October 1, 2021 and September 30, 2022, with defaults counted through September 30, 2024 (Federal Student Aid, FY 2022 briefing). The rate reaches the College Scorecard about two years after the cohort closes, so the newest published cohort always trails the calendar.

Two things follow. The cohort is former borrowers, most of whom left the college years before the rate was published, so it describes a past group, not current students. And the cohort is the whole institution, pooling every program and every kind of student who borrowed; the Scorecard also publishes field-of-study figures, but a college-level rate is one number for everyone.

Why the 2020 to 2022 cohorts look better than they are

Federal student-loan payments were paused from March 13, 2020 to September 30, 2023, and Federal Student Aid states in each year’s briefing that during the pause no borrower with a Department-held loan entered default. A cohort default rate counts defaults over three fiscal years, so the FY2020, FY2021 and FY2022 cohorts spent their entire counting window inside the pause and the twelve-month on-ramp that followed it. Their rates are at or near zero at almost every college, by construction, and they say nothing about whether those borrowers repaid.

The FY2019 cohort is the harder case: its window ran from October 2018 to September 2021, so it had about eighteen months of normal repayment before the pause began. Its rate is real but reduced, and not comparable with the FY2018 cohort before it. The FY2023 cohort has the same problem from the other side. TuitionScan labels every figure from an affected cohort in plain words beside the number, and never drops the figure, because the Department published it. The last cohort with a clean three-year window is FY2018, in the Scorecard’s 2020–21 file.

What the repayment statuses add

Default is the end of a long road. The Scorecard’s borrower-based repayment statuses show where a college’s undergraduate federal-loan borrowers stood one, two and four years after entering repayment, as eight shares that add up to everyone in the cohort: paid in full, making progress (balance going down), not making progress, in deferment, in forbearance, delinquent, in default, and discharged. The two-year split is the most complete picture the Department publishes, and TuitionScan draws it as a single bar. For smaller cohorts the Department publishes each share as a range, such as “5% or less”, rather than an exact figure; the page prints the range as given instead of drawing a bar it cannot justify.

These statuses have their own cohort years, older than the default-rate cohort, and they were last published in the Scorecard’s 2019–20 file. Statuses measured in the 2019–20 award year or later were read during the payment pause, when no payment was due, so their “making progress” and “in default” shares carry the same label.

Why a rate is not a ranking

A default rate moves with who borrows at a college, how much, what they earn afterwards, and the economy in the years after they leave. Many cohorts are a few hundred borrowers, some a few dozen, and the Department withholds a figure entirely when too few borrowers stand behind it, to protect their privacy. A difference of a point or two between two colleges is often a handful of people. For all of those reasons a default rate is a figure about an institution’s past borrowers, not a measure of the institution.

So TuitionScan does not rank colleges by it. The loan default and repayment tool shows where a college’s rate falls within the spread of every published rate for the same cohort, as one of four bands, and nothing on the site orders colleges by any loan figure. A “worst default rates” list would be a list of which colleges enrol the most students who borrow with the least to fall back on, dressed up as a verdict on the college.

Reading a college’s page

On any college’s cost page the loan block reads top to bottom: the cohort year and the number of borrowers behind the default rate, the rate itself with its band, the two-year status bar with every share, the one-year and four-year statuses in a small table, and the median federal debt of graduates with the monthly payment it implies on a standard ten-year plan. Every figure carries the Scorecard field it came from, so you can check it against the Department’s own file. A figure the Department withheld says “not published for this cohort”, never zero.

Read the net price first. What students actually paid after grant aid is the figure that decides how much a family borrows; the loan figures then show how borrowers at that college fared once the bills came due, with every caveat above in view.