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What exactly is CDR? CDR stands for Cohort Default Rate. It’s the percentage of a school’s students who have gone into default on their student loans. For example, a college with a 6% CDR has six percent of its graduates who have gone into default.

Why is this important? First of all, it’s not good for anyone to go into default with their student loans. A loan goes into default when it hits 270 days, or nine months, past due. Collection actions usually start when the loan approaches a year past due. But even before it gets to the point where collection actions are taking place, it’s already been noted on a credit report. Every missed payment will get reported to credit bureaus, and that can negatively affect your credit score. The default itself will also bring the credit score down as well. That will make it harder to qualify for credit later on. Remember, if you have a good (or great) credit score, your interest rates will generally be lower on auto loans, mortgages, and credit cards.


Most important, there is no reason for a loan to go into default. Why? Because there are too many options available to student borrowers, who are in financial difficulty, to avoid going into default. You can see options like forbearance and deferment or select a repayment plan that works for you, on

The effects can go beyond the individual student. Schools are assessed on their CDR. If a school has a low CDR, or below 10%, this is a benefit to schools (like being rewarded with a lower monthly car payment if you have a perfect driving record). Students at schools with low CDR rates don’t have to wait for disbursement of financial aid and can receive multiple disbursements in a single school year.

On the flip side, a school can be penalized if the CDR is too high. If the CDR is 30% or above, a school may lose access to financial aid, both federal student loans and grants. That means students at those schools can only get private student loans, without the protections or support of a federal loan. It can also mean less money available for programs students need.

The CDR encourages schools to work with students to manage and repay student loans. Many schools use companies like iontuition and its sister company i3 to work with students to plan repayment and avoid problems down the road, for both schools and students.

To ensure your loans are on track, sign on to iontuition and find out what the options are. Planning ahead now will help your credit and your school’s CDR.


Tom Wray


Tom Wray is all about the research, getting it right, and making it relevant. He’s got solid journalistic experience in all forms of content delivery – and he’s got his keyboard humming with what’s up and important for students, college admins, parents, employers and news junkies.