ASA Blog

JANUARY 28, 2019

For over 60 years, American Student Assistance® (ASA) has been an advocate for students. At its inception in 1956, ASA® was created to solve one fundamental social problem—college was only for those who could afford it. Students who didn’t have the means to go to college also didn’t have the credit necessary to secure a loan from a private lender to pay for their education. As a result, in 1956 the Massachusetts legislature created the Massachusetts Higher Education Assistance Corporation (today doing business as American Student Assistance) to fill that gap and ensure that anyone who had the desire to go to college could find a way to pay for it. The ASA model became the basis of the federal student loan program in 1965, which higher education opportunities for millions of Americans.

Over the years, higher education changed and evolved. Where student loans were once a supplement to funding higher education, a crucial tipping point came when students were required to take on more and more debt to pay for their education, and in tough economic times struggled to pay it back. ASA found itself at a crossroads, and as a result, ASA’s role as advocate took a new form.

With the help of Senator Edward Kennedy, ASA worked with Congress to establish a new system to reform the role of the guaranty agency from one of middleman to one of borrower advocate. The Voluntary Flexible Agreement (VFA) that was formed in that legislation allowed ASA and other similar agencies working with the federal Department of Education (ED) to change the terms of their contract with ED. Instead of being paid to collect on student loans, ASA was paid to work as hard as possible to keep borrowers in good standing on their loans. While the VFA contract was eventually canceled by ED, this borrower-centric approach to doing business has been ASA’s focus ever since.

With the change in the Federal Family Education Loan Program (FFELP) in 2010, ASA’s advocacy efforts evolved again. Recognizing that students were struggling to pay their enormous debt burdens without a fundamental understanding of basic finances, ASA embarked on an effort to increase the financial competencies of student loan borrowers and help them understand their debt obligations. We launched an online financial education program called Salt®, we advocated for reforms to the Higher Education Act that included more financial education for student loan borrowers, and we pushed for policy changes that would ease the burden of student loan debt. This included advocacy campaigns around public service loan forgiveness, research on the impacts of student debt, and a legislative push to highlight the need for student loan repayment as an employee benefit.

Today, ASA’s advocacy work is evolving again. Visit our advocacy page to see how we are carrying out our expanded mission to help students avoid higher education missteps before they occur.

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