About the Cohort Default Rate

Federal student loan borrowers are typically required to begin repayment six months after graduating, leaving school, or dropping below half-time enrollment. If no payments are made for 270 days (approximately nine months), the loan enters default.

The U.S. Department of Education tracks the percentage of federal student loan borrowers who default within three years of entering repayment. This measure is known as the Cohort Default Rate (CDR) or the three-year CDR.

Each year, the Department of Education releases official cohort default rates for institutions participating in the federal student loan program. The most recent rates (FY 2021) were published in September 2024, with FY 2022 rates expected in September 2025. Due to the federal student loan payment and interest moratorium in effect until August 31, 2023, the national cohort default rate is currently 0%.

Key Terms for Understanding the Cohort Default Rate

Terra State Community College
THREE-YEAR OFFICIAL COHORT DEFAULT RATES

Fiscal Year 2023  2024  2025 
Default Rate  24.4%  37.5%  0% 
Number in Default  74  108  0 
Number in Repayment  226  179  198 


How we compare nationwide:
The delinquency rate for the entire federal student loan portfolio is above 30%.

Consequences of Default


The consequences of defaulting can not only impact your ability to borrow but can impact your finances as well. Consequences may include the following:

  • The entire unpaid balance of your loan and any interest you owe becomes immediately due.
  • Your loans may be turned over to a collection agency.
  • You can be sued for the entire amount of your loan.
  • You will be liable for the costs associated with collecting your loan, including costs and attorney fees
  • Your wages may be garnished.
  • Your federal and state income tax refunds may be taken for treasury offset.
  • The federal government may withhold part of your Social Security benefit payments.
  • Your defaulted loans will appear on your credit history for up to 7 years after the default claim is paid.
  • It make take years to reestablish a good credit record.
  • You may not be able to purchase or sell assets, such as real estate.
  • You will not receive additional federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time, monthly payments. 
  • You may be ineligible for assistance under most federal benefits programs.
  • You can no longer receive deferment or forbearance, and you lose eligibility for other loan repayment benefits, such as the ability to choose a specific repayment plan.
  • Subsidized interest benefits will be denied.
  • You may not be able to renew a professional licenses.
  • You may be prohibited from enlisting in the Armed Forces.
  • Your school may withhold your academic transcript until your defaulted student loan is satisfied. The academic transcript is the property of the school, and it is the school's decision - not the US Department of Education's or your loan holder's - whether to release the transcript to you.
  • YOU WILL STILL OWE THE FULL AMOUNT OF YOUR LOAN.

Help: Terra Partners with Student Connections 

Student ConnectionsTerra State partners with Student Connections to assist students with their loan repayment options. Please contact a borrower advocate by calling (866) 311-9450. If you prefer a DIY approach, answers to many common student loan questions can be found at My.StudentConnections.com.