All-time Low Default Rate for American Education Services

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Students benefit from default prevention efforts.

We stand by our borrowers for the life of their loan

American Education Services (AES) announced today that it has achieved the lowest cohort default rate in its history. This accomplishment is the direct result of AES’ industry-leading, award-winning default prevention efforts.

AES has achieved a cohort default rate of 2.9 percent for the 2005 fiscal year, which is the most recent reporting timeframe. This is significantly below the national average of 4.6 percent and a 24 percent decrease from their 2004 fiscal year rate of 3.8 percent.

"We stand by our borrowers for the life of their loan," explained James Preston, Interim AES President and CEO. "It is our goal to see them through successful repayment and on to a successful life. There are so many obstacles that can prevent someone from fulfilling their repayment obligation. We work with them in every way possible to overcome these obstacles, be it through a graduated repayment plan or a deferment."

The cohort default rate measures the percentage of borrowers who have defaulted on their student loans within 12 to 24 months of entering repayment, which is generally six months after the borrower leaves school. When borrowers default on their student loans, federal taxpayers pay a large portion of the costs because the loan is federally guaranteed. Therefore, AES’ success in preventing loan defaults translates into millions of dollars in savings for taxpayers.

AES' professionally trained loan counselors work with borrowers on a one-on-one basis to help them avoid default. Each borrower’s unique situation is assessed, and together, the counselor and borrower find the best repayment plan. For some borrowers temporary repayment relief from loan payments is provided in the form of forbearance or deferment. was created as a debt management website to supplement the counseling provided by AES and financial aid administrators. The site offers student loan borrowers information, techniques, tools and practical advice on how to approach everyday financial situations. It guides them in understanding their student loan commitment, financial budgeting and the advantages and dangers of credit cards. As part of a nationally recognized default prevention awareness campaign, this innovative and successful site directly contributes to AES’ historically low cohort default rate. has been successfully promoted to college students and recent grads via the $20,000 Lighten Your Loan Sweepstakes direct response campaign, which was awarded a prestigious Stevie Award in The 2007 American Business Awards, the only national, all-encompassing awards program honoring great performances in business. This innovative approach to financial literacy sweepstakes further demonstrates AES’ commitment to reaching young student loan borrowers and helping them start life on the right financial footing.

American Education Services
American Education Services (AES) is among the nation’s leading providers of student financial aid services. Each year, AES serves millions of students and thousands of schools through its loan guaranty, servicing, and financial aid processing systems. As a nonprofit enterprise with more than 100 billion in assets under management, AES channels its earnings into a wide array of public service programs and initiatives that help ease the financial burden of higher education.

Focused on guaranteeing the next generation of leaders, thinkers and doers, AES is a pioneer of pro-student products and services, such as its Zero Guaranty Fee Policy and low-cost student loans. From early awareness, to managing the financial aid process and sound student debt management, AES is a trusted source of information and advice for students, parents, school counselors and financial aid offices across the country. AES is also the home of the award-winning college-planning website, as well as the debt management resource For more information, please visit us at

Keith New, 717-720-2509
Nicole Elbertson, 717-720-2509


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Keith New

Nicole Elbertson
American Education Services
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