Aspire Resources Inc. is a West Des Moines, Iowa based company that was established in 2001 as a for-profit subsidiary of Iowa Student Loans. Its main aim is to provide financial services to student loan providers in Iowa who were not included in the Iowa Student Loans Tax-Exempt designation, thereby complementing the services provided by Iowa Student Loans. Despite the fact that Iowa Student Loans is the parent company and sole owner of Aspire Resources Inc., the company is run by a separate board of directors that were handpicked by the Governor of Iowa.
What Does Aspire Loan Servicing Do?
The company works with lenders, educational institutions, and students supply them with private loan services and loan data transfers via its iLink service. Aspire Resources Inc. was awarded a lucrative contract by the Department of Education in April 2012, allowing the corporation to become one of the many student loan servicers around the country.
The contract that Aspire Resources was awarded gave them the privilege of handling 200,000 student loan accounts from the William D. Ford Federal Direct Loan Program. The decision to allow a nonprofit institution to handle these loans came after a piece of legislation passed in 2010 that allowed the government to distribute some of these loans among nonprofits and their affiliates, as long as they could show that they were qualified to do so.
However, the summer of 2015 saw the exit of Aspire Resources from the federal direct loan servicing business. This came after an announcement made by Iowa Student Loan in July 2015 that stated that the task of providing these loans was being shifted to the Missouri Higher Education Loan Authority (MOHELA). August of the same year saw Iowa Student Loan provide a little more information on the circumstances of Aspire Resources sudden exit by explaining that the nonprofit had expected to be able to expand its business, as was expressed in the press release that was distributed when the deal was initially confirmed.
In fact, the company’s board was so optimistic that they were looking forward to expanding their business to the national level, and they even went as far as making 60 new hires in an attempt to be prepared to offer the highest level of service despite the extra workload. Their ultimate goal was to get to a point where they were able to build a revenue stream that would allow them to invest in mission-related programs for Iowa students and their families. They also saw this as an opportunity to provide employment to the citizens of Iowa.
At the time, it seemed very possible that this would happen as Aspire was the only Iowa based organization that was awarded a contract to service loans in the William D. Ford Federal Direct Loan Program. They were also one of the highest rated student loan service providers when it came to borrower satisfaction, loan delinquency, and satisfaction of Department of Education personnel. This is despite the fact that a good borrower satisfaction score is extremely hard to achieve, especially during the evaluation process.
However, even with all the positive reviews and high scores, every attempt that Aspire made to expand the business and increase the number of accounts that they handled was shut down.
This meant that the contracts that were awarded in 2012, though lucrative at the time, had become a “heavy cost burden” to the organization, forcing them to shut down the program. The statement was made by the Iowa Student Loan President and CEO Steve McCullough, who stated that the investment that was made when the contract was awarded could not be justified, as the number of accounts needed to realize their returns were just not achievable. However, he did assure the people of Iowa that they would now become the full focus of the company’s activities, and that all programs provided by the company will be aimed at benefiting them.
The decision to cancel the contract did come at a price. The transfer of the contract from Aspire Resources to MOHELA meant that Iowa Student Loan had to cut its workforce by 60 employees; the same 60 employees that were hired by the company when they took over the loan portfolio in 2012, cutting the organizations employees from 300 to 240 people. The CEO was adamant that cutting his workforce was “an extremely difficult and disheartening task” and expressed his disappointment at the fact that the administration of the loans could not live up to the goals that were outlined in the 2010 legislation that congress approved. The reduction of the workforce happened before the contract expired on September 30, 2015.
However, despite the loss in workforce, Iowa Student Loan and Aspire Resources Inc.’s decision to transfer the portfolio to MOHELA may actually be a good thing for the company. It will allow Aspire Resources to concentrate on ensuring that the current small borrowing educational programs and initiatives receive the attention that they deserve, and that the funding necessary to supplement other student loan programs in Iowa is available.
This will ensure that the people of Iowa are provided with all the tools that they need to succeed in postsecondary education, and that the company will be able to continue to strive to create programs that benefit local Iowans.
In fact, the company is so optimistic that they will be able to find new business using the experience that they gained while they were servicing federal loans. They have even stated that they are currently looking into “several significant new business opportunities”. These opportunities include a possible partnership with the Illinois based LinkCapital, a company that refinances medical professionals’ loans.
The statement was made in response to rumors that the federal government had lost faith in the company’s ability to provide financial services. However, these rumors were debunked by the Department of Education, which released a statement confirming that Aspire Resources Inc. had in fact requested to cease operations in the sector, and that the decision to exit had nothing to do with its performance in the industry.
The Aspire Servicing Center (ASC) is another Iowa Student Loan subsidiary that was founded in 2014; however, it supplies student loan customer services to both private and federal student loans. Unlike Aspire Resources, The ASC still provides student loan customer service to private and federal student loan bearers who had their services provided by Iowa Student Loan. It also continues to handle services to borrowers with private loans serviced by other lending institutions.
Repayment Options and Loan Forgiveness
Federal student loans come with a whole host of repayment options, from the standard option which gives borrowers the chance to pay back their loans in the shortest amount of time for the lowest interest rate, to graduated and extended repayment plans. The minimum monthly payment needed to qualify for a standard loan repayment plan is equal to the amount needed to complete paying the loan in the specified repayment term. However, your repayment term could be as long as 20 years, so your loan repayments may not be as high as you think. Extended plans can give borrowers the chance to pay back their loans in periods lasting up to 25 years. However, these have some of the highest interest payments.
Many of the federal loans that are offered today give borrowers the chance to have at least one income-based or income-sensitive repayment plan. The rules for these programs are created and monitored by the federal government, rather than the financial institutions that service these loans. However, borrowers are always advised to get in touch with their loan servicer if they need any assistance choosing the right payment plan for them.
People who work in public service who have federal loans are eligible for loan forgiveness through a couple of programs that are offered by the federal government. Loan forgiveness is also available to those who have died or have a permanent disability that does not allow them to earn an income. It is also available to those who have undergone bankruptcy, and those whose financial institutions shut down, or who received false certification.
However, for those borrowers that have undergone bankruptcy, they will have to prove to the bankruptcy court that repaying their loans will cause them undue hardship if they would like to have their loans forgiven. If you would like to find out more about loan forgiveness on federal loan repayments, feel free to visit the Aspire Servicing Center’s website.
Aspire Resources Payment Options
Aspire gives borrowers the freedom to choose from a wide range of payment options, and offer terms that extend to periods of up to 20 years for private student loan borrowers. Graduated repayment plans give borrowers the chance to start off their loan repayments with small amounts that increase by 10% every two years. However, this means that those who opt for the graduated repayment plan pay more in interest during their repayment time because the principle balance reduces at a much slower rate. Additionally, for those that have a variable-rate loan, the 10% increase comes in addition to any adjustments that are made to the interest rate that you initially had.
There is also the “Select-2” plan which lets borrowers pay interest for only the first two years of their loan repayment. This means that the loan amount levels out for the rest of the payment term, which in some cases could be as long as 20 years. For those that are interested in finding out more about the loan repayment plans that are best for them, you should take a look at the private loan repayment plans on the Aspire Service Center website.
For those people who do not need to make payments while they are in school, or who are going through a separation period, their loans are automatically placed in deferment. However, during this time, they are still accruing interest, and the students will be alerted of the difference through monthly interest statements. During this time, borrowers have the option of making additional payments to ensure that they have covered the interest. This will help prevent the interest from capitalizing, or being added to the principal balance of the loan when the deferment ends. Reducing the interest in this manner could also mean that the borrower pays less over time once the deferment period expires.
Borrowers who access Aspire services also have a whole host of different methods in which they can make their payments, including by mail, auto-debit and by making a simple phone call. For those that are interested in paying using the auto-debit service, there is no need to worry about hidden fees and extra charges as the company does not add any of these. However, there is no discount for using the service. Aspire also allows borrowers to make their payments early and to make extra payments, giving them the chance to repay their loans faster.
The different loan repayment options listed above are all determined by the terms of your specific loans. For instance, there are many private loans where deferment of payment is automatic while the borrower is enrolled in school, while many of the newer private loans that are being offered require interest-only payments. This is one reason why it is very important to get advice on the best loan repayment plan for you.
Review of Aspire Student Loans
Despite the fact that Aspire Resources is not accredited by the Better Business Bureau, the company has an excellent record with the bureau, and has even managed to achieve an A+ rating. The Better Business Bureau has managed to close more than 38 complaints it received about Aspire resources in the last 3 years alone, including 11 in the period between November 2014 and November 2015.
Many of the complaints that were filed were related to the high volume of emails and phone calls borrowers had to endure, especially in the first month that they were served by Aspire Resources. However, the complaints that were made against Aspire are very similar to other complaints lodged against other third-party student loan service providers. Many of complains made state that the individuals felt they received inadequate customer service, or inadequate communication from the provider.
Author: Jeff Gitlen
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