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The national cohort default rate has dropped to 0 percent, according to federal data released last week that shows how the pandemic pause on student loan payments affected one of the Education Department’s few accountability measures.
The rate, which measures the percentage of borrowers at an institution who have defaulted on their loans over a three-year period, can lead to institutions losing access to federal financial aid. Currently, an institution risks losing access to federal financial aid if its rate hits 30 percent for three consecutive years or 40 percent in one year.
However, the pause on payments has rendered the cohort default rate meaningless. The fiscal year 2020 default rates are based on students who entered repayment between Oct. 1, 2019, and Sept. 30, 2020, and who defaulted between Oct. 1, 2019, and Sept. 30, 2022. Payments were paused in March 2020.
The national cohort default rate dropped each year of the pandemic, but this is the first time it has hit 0 percent. Last year, the national rate was 2.3 percent.
