The U.S. Department of Education’s Federal Student Aid Data Center has released a critical new report: non-payment rates by institution. This data reveals that over 1,000 post-secondary institutions have non-payment rates exceeding 30%, placing them at significant risk of losing Federal Student Aid eligibility due to high Cohort Default Rates (CDR).
These non-payment rates represent the percentage of Direct Loan borrowers who entered repayment since January 2020 and were 90 or more days delinquent on their federal student loans as of mid-May 2025. While not yet the official Cohort Default Rate (CDR), these figures serve as a powerful proxy, directly correlating to the future of your institution’s federal funding eligibility.
The Time to Act is NOW (Actually, 12 months ago)
Ignoring these non-payment rates could have devastating consequences, including the potential loss of Title IV funding. Preventing high CDRs before they occur is significantly easier and less costly than attempting to appeal a CDR determination after the fact.
The first technical defaults occurred at the end of June when borrowers reached 270 days delinquent. The first official defaults (360 days) will begin to appear around October 1st. This leaves very little time for schools to proactively contact borrowers and guide them into sustainable repayment paths.
Outreach Can Prevent Defaults
The Department of Education’s May 5th Dear Colleague Letter specifically urged institutions to contact former students before June 30th and inform them about their student loan repayment obligations. That letter also explicitly stated that the Department would be publishing these institutional non-payment rates.
If your institution has high non-payment rates, there’s still time to implement a robust Default Aversion plan – it’s truly better late than never. IonTuition has been a leading provider of Default Aversion services for over 15 years, successfully helping institutions of all types and sizes. We can help you effectively contact your borrowers and guide them into repayment plans that will keep them out of default.
Request a CDR Health Check to see how your 2024 Cohort Default Rate projection.