American Student Assistance
# American Student Assistance

American Student Assistance (ASA) is a national non-profit organization to help students make informed choices to achieve their education and career goals. It is headquartered in downtown Boston, Massachusetts.

## History

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. 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.

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.

## Voluntary Flexible Agreement

In 2001, ASA became one of four guarantors to enter into a Voluntary Flexible Agreement (VFA) 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 was 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.

Results of these Wellness activities proved that the proactive approach to giving student loan borrowers the right information at exactly the right time were effective in preventing repayment problems. 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; since 2002, ASA has beaten national Cohort Default Rates (borrowers newly entering repayment) by more than 46 percent, with 95 percent of the loans in its portfolio in good standing, on average; and ASA saved taxpayers approximately $120 million through prevented student loan defaults between fiscal years 2001 and 2008.

All student loan guarantor VFAs were canceled by the U.S. Department of Education in 2008.

## Looking forward

In 2010, federal legislation ended privately financed, federally guaranteed education loans under the Federal Family Education Loan Program, in favor of Direct Loans originated directly by the federal government. Therefore, ASA has guaranteed no new education loans since July 1, 2010. The organization continues to fulfill its obligations as a student loan guarantor to the U.S. Department of Education for its remaining FFELP portfolio, which stands at approximately $35 billion and 1.3 million borrowers.

Additionally, in 2012 ASA launched “SALT,” a financial education membership program that teaches students how to borrow less and more wisely for higher education; how to repay student loans successfully; and how to build better overall financial skills in life. ASA's goal with SALT is to revolutionize the way students finance and repay higher education, transforming them from passive financial aid recipients to instead proactive, financially savvy consumers who truly own their student loans and finances.

ASA is often cited as an expert reference on student loans by national and local media.

In February 2020, a $1.5 million grant from American Students Assistance was awarded to Skills for Rhode Island's Future for its PrepareRI internship program. The announcement was given by Gov. Gina Raimondo at a news conference at the Citizens Bank headquarters.

