Administering loans and providing comprehensive financial aid information in Massachusetts
“…Under the current student loan system, the Department of Education pays lenders and guarantors more for collecting on defaulted student loans than for keeping borrowers in good standing. To me, that’s just plain backwards. That’s why I support the model used by American Student Assistance—the designated student loan guarantor in Massachusetts—which has a special arrangement with the Department of Education in which it receives a higher fee for keeping borrowers’ accounts healthy.”
–Massachusetts Senator Edward M. Kennedy
ASA is the designated administrator of the Federal Family Education Loan Program (FFELP) for the Commonwealth of Massachusetts. Under the FFELP guidelines, every state must be represented by an agency that will guarantee student loan funds on behalf of the federal government. While ASA guarantees and administers FFELP loans, it is also responsible in this role for providing comprehensive information on access to college, financial aid, and related outreach resources in its designated areas.
ASA works under a Voluntary Flexible Agreement (VFA) (see Terms to Know at right) with the Department of Education (ED) and is one of only five administrators across the U.S. who has entered into such an agreement with ED. This special relationship distinguishes ASA among guarantors for its dedication to putting students and families first. Other guarantors have a financial incentive to function as little more than debt collectors, but through the VFA, American Student Assistance’s business model matches its ideological commitment to preventing default, protecting students’ credit, and helping families borrow for education with great success.
In our unique position as the designated FFELP administrator for Massachusetts, and driven by our public-service mission to provide student loan borrowers with the education and encouragement they need to successfully manage their debt, ASA cooperates closely with many other non-profit agencies to promote financial responsibility through education and community outreach (see Terms to Know at right).
The following are some of the outreach colleagues with whom we work to provide meaningful financial literacy tools to students and families, including adult learners, high school and middle school students, and parents of college-bound children.
TERI
ASA has enjoyed a close relationship with The Education Resources Institute (TERI) since we helped foster its creation in 1985. Through TERI’s College Access Centers, located at public libraries in Massachusetts’ Metro-Boston/Worcester area, facilitators provide one-on-one counseling to help students and families plan for college, fill out forms like college applications and the FAFSA, and understand how college can translate into a career. The Centers provide important information about Massachusetts-based grants and scholarships and give customized advice about how to prepare for college academically and financially. ASA offers both financial and informational support to the Centers.
TERI College Access efforts include COACH, providing decision-making guidance for college-bound 11th and 12th graders in Boston public schools; College Knowledge PREP, a two-year program starting in 10th grade that focuses on building skills and introducing students to potential careers; Talent Search, which focuses tutoring and support on low-income and first-generation college aspirants; and Upward Bound, a Brockton, MA, summer program that offers intensive coursework and a chance to experience college life firsthand.
ASA is proud to be a longstanding supporter of the College Access Centers and the vital work of TERI within Massachusetts communities.
Colleges of Worcester Consortium, Inc.
The Colleges of Worcester Consortium operates free Educational Opportunity Centers (EOC) in Boston, New Bedford, Lynn, Worcester, Springfield, and Pittsfield, MA. These Centers aim to help individuals aged 19 and older gain the resources and knowledge they need to continue their education.
The EOC emphasizes the practical value of education, helping students thoroughly research what careers are open to them, what skills and education are required, and how much money they can earn back on their investment in education. The Centers also aid students in finding the right school or program for their needs, other community resources that may be useful, and financial aid and scholarship information. ASA supports this mission by providing specialized financial aid information and spreading its Wellness (see Terms to Know at right) message among the EOC’s clients to promote fiscal literacy.
In addition, ASA and the Colleges of Worcester Consortium recently collaborated to bring financial education to both students and parents in two Worcester-area public high schools. In the first year of this program at Doherty and South high schools in Worcester, MA, ASA training specialists conducted four interactive financial literacy training sessions in senior-year English classes over the course of six weeks. The ASA staff used games and real-world examples to explain the dangers of misusing credit cards, the importance of budgeting, and the benefits of collecting interest in bank accounts.
Meanwhile, ASA held three night sessions over the course of the school year that were geared specifically for parents. In the first session, ASA facilitators explained how to navigate the financial aid process. In a later session, they provided parents with the insider perspective on how to pay for college and borrow wisely—applying the Wellness program to prevent families from taking on more debt than they could handle and winding up in default. In the third session, ASA reviewed families’ financial aid offers individual by individual to help each family make the wisest choice for their financial health.
In addition to continuing the program at the Worcester high schools, ASA hopes to grow its relationship with the Colleges of Worcester Consortium and continue to find new ways to support its mutual goals.
MEFA
The Massachusetts Educational Financing Authority (MEFA) is a state non-profit organization dedicated to providing education financing and information programs to benefit Massachusetts families and students. Beyond college savings plans, low-cost loans, and consolidation options, MEFA, with the backing of ASA, offers free financial aid seminars and a telephone hotline with answers to financial aid questions. ASA supports MEFA’s efforts to disseminate this valuable information to Massachusetts borrowers through the provision of intellectual, financial, and physical resources.
