DALLAS, TEXAS: September 23, 2009 -- Despite the lingering effects of the deepest economic recession of the past half-century, the number of students defaulting on their Federal Direct Student Loans remains low, according to statistics from the U.S. Department of Education.
Affiliated Computer Services (NYSE:ACS), the government's sole servicing provider of Direct Student Loans, has taken steps to control the cohort default rate, which measures defaults occurring within two years after repayment begins. Year-over-year, the cohort default rate for the Federal Direct Student Loan Program has increased by only 2 percent to 4.8 percent, with the slight rise due to the economic slowdown. In contrast, cohort default rates within the Federal Family Education Loan (FFEL) Program soared by 36 percent to 7.2 percent.
A key contributor to the low cohort default rate is the company's dedication to financial literacy programs, self-service tools and outreach programs, according to Tim Conway, senior vice president and managing director, ACS Federal Solutions. He said these measures are key drivers behind why Direct Loan cohort default rates have been significantly lower than national and FFEL averages for the past five years. In outreach programs alone, ACS conducts nearly 20 million phone calls annually to provide education and counseling to student loan borrowers. ACS has been servicing loans for the Department of Education for the past 15 years, and now services more than 13 million borrowers annually.
"ACS has a long history of developing delinquency management programs that focus on those students with the greatest need," said Conway. "This outreach will prove critical as the cost of education continues to rise in the future."
ACS makes constant improvements to its delinquency and default prevention efforts to maintain and improve asset performance on behalf of student loan borrowers, the Department of Education and the taxpayer.
Recent customer satisfaction scores on ACS' performance in the Direct Loan Program are the highest in the industry - ranking the company's performance at '80' from the American Satisfaction Customer Index, equaling or surpassing both the government and financial sectors.
"ACS' work for the federal government is an example of our company's deep commitment to education," said Joseph Doherty, executive vice president and group president, ACS Government Solutions. "In addition to the Department of Education, ACS provides solutions to more than 500 education clients representing nearly 900 campuses as well as many of the largest lenders and secondary markets in the country."
About ACS
ACS, a global FORTUNE 500 company with approximately 74,000 people supporting client operations reaching more than 100 countries, provides business process and information technology solutions to world-class commercial and government clients. The company's Class A common stock trades on the New York Stock Exchange under the symbol "ACS." Learn more about ACS at www.acs-inc.com.
Posted 09/24/09 to www.NASFAA.org. Posting of press releases 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.
