American Student Assistance

American Student Assistance (ASA) is a non-profit services and advocacy organization dedicated to helping students and families manage higher education debt. It is headquartered in downtown Boston, Massachusetts.

Name change

American Student Assistance was founded in 1956 under the name Massachusetts Higher Education Assistance Corporation (MHEAC). The organization began when a group of people approached Massachusetts local businesses for philanthropic donations with the idea of creating a pool of money to guarantee loans for higher education.^[1] MHEAC went on to become the nation’s first student loan guarantor. Its model of a student loan program—funded by local banks and insured by a non-profit organization—was replicated across the country and by 1965, there were 14 loan guarantors in the United States.^[2]

In 1990, the United States Department of Education designated MHEAC as the guarantor for Washington, D.C. By 1992, MHEAC had begun to expand its services nationwide, so the organization adopted a trade name of American Student Assistance to reflect that its services were available to U.S. student loan borrowers everywhere .^[2]

Voluntary Flexible Agreement

In 2001, ASA became one of four guarantors to enter into a Voluntary Flexible Agreement with the US federal government, changing its focus from back-end default collections to an emphasis on delinquency and default prevention. The Voluntary Flexible Agreement enabled Federal Family Education Loan Program guarantors to develop programs and techniques to help borrowers avoid student-loan default and all of its negative consequences. ASA’s Wellness program is designed to deliver debt management information to borrowers at critical points along the life of their loan in order to prevent repayment problems before they start. According to ASA studies, graduates who received financial literacy and career information from ASA during the first two years of repayment were half as likely to default as those who did not, and ASA saved taxpayers approximately $120 million dollars through prevented student loan defaults between fiscal years 2001 and 2008.

The annual Cohort Default Rate along with the annual default "trigger" rate that tracks the total amount of defaulted loans in a guarantor's portfolio, are important indicators of a guarantor's ability to keep its loan portfolio in good standing. In 2008, ASA claimed a Cohort Default Rate of 3.9%, well below the national rate of over 30%

Looking forward

ASA is often cited as a reference for questions about student loans by national and local media.^{[3][4][5][6][7]}

In 2005, the company changed its tagline to "Think About Tomorrow."

ASA currently manages a portfolio worth more than $41 billion.^[8] In 2008 and in 2009, Boston Business Journal named ASA one of the best places to work in Boston and Boston Globe named ASA as a Top Place to Work in 2008, 2009 and 2010. The company currently has approximately 500 employees.

References

1. ^ "What the World Needs Now: Cross-National Student Loan Programs", by Thomas D. Parker, The New England Journal of Higher Education, Fall 2006. Online at FindArticles.com.
2. ^ ^{a b} American Student Assistance. 50 Years of Making a Difference. 2006.
3. ^ " At 105 Colleges, a Cheaper Federal Student Loan", New York Times, November 16, 1993.
4. ^ "Grads neck-deep in debt have options", By Sandra Block, December 1, 2006, USA Today
5. ^ "Finding Student Loans", television interview with Aimee O'Brian-Jeyarajan of American Student Assistance, MyFox Boston, 29 July 2008.
6. ^ "Student loan chat with Betsy Mayotte", chat transcript with American Student Assistance's Betsy Mayotte, August 7, 2008, Boston Globe.
7. ^ "Lenders abandoning private student loans Following student loan rules help borrowers make the grade", Carolyn Bigda, Chicago Tribune, August 10, 2008.
8. ^ "American Student Assistance Company Description", Hoovers.

External links

• American Student Assistance official web site