Define the term "Cohort Default Rate" as it relates to financial aid.

The term "Cohort Default Rate" specifically refers to the percentage of a school's borrowers who enter repayment on their federal student loans and then go on to default within a designated time frame, typically measured over a three-year period. This metric is significant for evaluating the financial health of educational institutions and the effectiveness of their loan programs. A high default rate may indicate that graduates are struggling to repay their loans, which can raise concerns about the quality of education provided or the employability of graduates.

Monitoring the Cohort Default Rate is crucial for federal student loan programs, as it also influences an institution's eligibility for financial aid programs. Schools with high default rates can face penalties and reduced access to federal student aid funds, which can affect their ability to attract and retain students. Understanding this metric helps stakeholders, including students, policymakers, and educational institutions, assess the potential financial outcomes of borrowing for education.