Federal Loan Servicing Report Shows Aspire Scores Well
Company Exits Direct Loan Servicing, Refocuses On Other Loan Servicing Opportunities, Programs for Iowans
Aug. 7, 2015
The U.S. Department of Education recently released a quarterly evaluation of loan servicer performance showing Aspire Resources Inc. among the top in key areas. Aspire is a wholly-owned subsidiary of the Iowa-based nonprofit, Iowa Student Loan.
The evaluation for the quarter ending March 31, 2015 shows results for each servicer of federal student loans within the William D. Ford Federal Direct Loan Program (Direct Loan), including Aspire, on five metrics evaluating borrower satisfaction, loan delinquency and satisfaction of Department of Education personnel. Borrower satisfaction is most heavily weighted during the evaluation process and Aspire continued to receive high scores in the borrower satisfaction category.
"This is a tribute to our hardworking employees, who are dedicated to helping borrowers repay their loans," said Steve McCullough, Iowa Student Loan president and CEO. "Achieving these results is bittersweet as we recently decided to exit the Direct Loan servicing business due to the heavy cost burden of maintaining this federal contract. Revenue from the contract is primarily driven by the number of accounts being serviced and the number of accounts allotted to Aspire, including future projections, simply was not enough to generate the revenue needed to offset the costs of maintaining the contract. It's important to note that Aspire will continue to provide high quality customer service to our other loan servicing clients, and our exit from Direct Loan servicing was not related to our performance. "
The Department of Education recently published information which confirmed Aspire's actions. The update to college financial aid officers included the following statement:
"One Not-for-Profit (NFP) servicer — Aspire Resources Inc. — is ceasing operations as a vendor in the federal student loan servicing team. This action is being undertaken at Aspire Resources Inc.'s request and is not related to its performance as a federal servicer."
Within the coming months, Aspire will transfer all federal Direct Loan borrower accounts to the Missouri Higher Education Loan Authority (MOHELA). This process, when completed will result in a reduced Iowa workforce from the current 300 employees to an organization of approximately 240 employees.
"Exiting our federal Direct Loan servicing contract was a very difficult decision for the corporation because of the impact on our employees," McCullough said. "During the last few years, we tried multiple avenues to obtain more accounts, with assistance from Iowa's state and federal officials, but unfortunately we were unsuccessful. Going forward, we can now refocus the full attention of our student loan servicing team on assisting borrowers in other student loan programs."
Iowa Student Loan and Aspire are currently pursuing several significant new business opportunities. The first of these is an alliance with Illinois-based LinkCapital, an enterprise engaged in providing student loan refinancing on favorable terms for medical professionals. This alliance will bring the benefits of LinkCapital programs to Iowa medical professionals, and additional loan servicing work to Aspire. Additional announcements on other expanded opportunities are expected in the coming months.
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Megan Garrett, Corporate Communications & Media Relations, (515) 273-7145, firstname.lastname@example.org
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