Default prevention efforts prove successful for students
Harrisburg, PA (February 27, 2007) - American Education Services (AES) today announced a historically low draft cohort default rate, which is a direct result of its industry-leading, award-winning default prevention efforts and represents a great savings for taxpayers.
AES' draft cohort default rate for the 2005 fiscal year fell to an all-time low of 2.99 percent, significantly below the prior fiscal year national average of 5.2 percent and a 23.1 percent decrease from the 2004 fiscal year rate.
"We work to help students achieve a higher education without the burden of unnecessary student loan debt," said Dick Willey, President and CEO of AES. "So when borrowers do find themselves struggling with debt, we help them to avoid the pitfalls of default. Our goal is to help students successfully repay their student loans - while maintaining positive credit ratings and gaining a solid financial footing."
The cohort default rate measures the percentage of borrowers who have defaulted on their student loans within 12 to 24 months of entering repayment, which is generally six months after the borrower leaves school. When borrowers default on their student loans, federal taxpayers pay a large portion of the costs because the loan is federally guaranteed. Therefore, AES' success in preventing loan defaults translates into millions of dollars saved for taxpayers.
AES provides professionally trained loan counselors who work daily with borrowers to find alternative options to help repay their delinquent student loans. Each counselor assesses the individual borrower's situation and then recommends the best repayment option or deferment alternative, including graduated payments and loan consolidation.
AES' default prevention team also helps educate students on the benefits of maintaining good credit and the hidden dangers of default and carrying a bad credit rating.
AES' debt management site, YouCanDealWithIt.com, provides students with information, techniques, tools and practical advice on how to approach common financial situations they might face. The site offers information and advice to help students better understand their student loan commitment, financial budgeting, and the benefits and dangers of credits cards. YouCanDealWithIt.com is part of a nationally recognized default prevention awareness campaign that contributes to AES' historically low cohort default rate.
For more information please visit YouCanDealWithIt.com.
###
American Education Services
American Education Services (AES) is among the nation's leading providers of student financial aid services. Each year, AES serves millions of students and thousands of schools through its loan guaranty, servicing, and financial aid processing systems. As a nonprofit enterprise with $94 billion in assets under management (1/31/07), AES channels its earnings into a wide array of public service programs and initiatives that help ease the financial burden of higher education.
Focused on guaranteeing the next generation of leaders, thinkers and doers, AES is a pioneer of pro-student products and services, such as its Zero Guaranty Fee Policy and low-cost student loans. From early awareness, to managing the financial aid process and sound student debt management, AES is a trusted source of information and advice for students, parents, school counselors and financial aid offices across the country. AES is also the home of the award-winning college-planning Web site EducationPlanner.org, as well the debt management resource YouCanDealWithIt.com. For more information, please visit us at www.aesSuccess.org.
Posted 02/28/07 to www.NASFAA.org. Posting of information in Constituent News is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.
