Jul 08, 2016 / by Alec Reinstadtler
BEST PRACTICES STEP 1: START WITH A CDR GOAL IN MIND
There are steps your school can take to have a positive impact on your school’s future financial stability and maintain your Title IV eligibility. You can also take action to boost future enrollment and manage your revenue. It all starts with a practical cohort default rate (CDR) in mind and the deployment of reliable analytical data to help your school assist more of your former students and minimize defaults.
Just as it’s possible for your school to incur penalties for high CDRs, you can enjoy perks for low CDRs, too, such as the ability to make single disbursements, and to avoid holds on loans to first-time students. With this in mind, do you think your school is doing all that it can to proactively manage CDR? It starts by determining the rate your school would like to target. Then, you can manage your CDR with a higher degree of success. Begin with these tips on starting with a solid CDR goal in mind:
Know the value of having good default rate data. There’s a difference between data – and actionable data. The most useful information helps your school understand CDR performance at any given moment, and most importantly, can gauge your progress compared with previous years. NSLDS reportingprovides insight about performance at a high level, but only at one specific point in time. This is better than nothing, but by itself, it is difficult to gauge and manage performance. Instead, you can better inform your CDR goal by relying on a variety of data points that will help your school make targeted, positive changes and ensure compliance.
Switch to a data driven approach. Invest in, and take advantage of, data tools available in the marketplace. By monitoring performance-based data through data warehousing and predictive analytics software, your school can monitor reporting trends that give you a better reference point for judging the performance of one cohort versus another – and for anticipating future performance as well.
Get predictive. A predictive, future-forward view of your CDR can help you allocate resources in a cost-effective way. Schools that have access to a comprehensive data warehouse and robust reporting capability reap the advantage of performance trends.
Make an impact by examining your data in a granular way. It’s possible for your school to measure your data with more pinpoint accuracy than ever before. In fact, the right tools can help you measure data at the program of study, by degree type, or by matriculation level, to find additional solutions for lowering or maintaining your CDR and providing a 360 view of your school’s default prevention options.
Are you sure that your school is doing all that it can to lower your CDR or prevent higher CDR rates? This default management article is part of Loan Science’s Default Management and Prevention series, designed to help your school dive deeply in to each of the five tips above. Stay tuned for the next post on Step 2, which examines exactly how you can organize your service data and reporting for success – or you can start at the beginning with our intro to the best practices in default prevention for school and student success.