American Education Services, better known as AES, is a student loan servicing company that manages student loans for borrowers on behalf of the federal government and private lenders. AES is part of the Pennsylvania Higher Education Assistance Agency (PHEAA) which was founded in 1963. Although PHEAA has been in existence for decades, AES was created in 2009 to service federal loans on behalf of PHEAA.
AES works on behalf of borrowers who hold federal student loans from the U.S. Department of Education and private lenders. They provide support for borrowers who have student loans, send bills, process payments and handle collections. For student loan borrowers who are having a difficult time meeting their student loan payment obligations, AES works with them to manage their repayments and determine if they are eligible for repayment plans and options through the federal government.
What AES Offers
Since AES services student loans, its customers are the borrowers themselves. Through AES, borrowers can access a variety of services related to their student loans. The AES website offers tools that allow borrowers to view and edit their loan terms. These online tools permit borrowers to consolidate their loans, change their student loan due dates, postpone payments, and more, all via a secure online portal. AES also offers automatic payments, phone payments, payments by mail, and smartphone (app-based) payments. AES also runs a separate website, Education Planner, where students and parents can learn more about financing, career options, and how to obtain federal student aid.
Because AES services federal student loans it offers a number of repayment options available to borrowers with these types of loans. The loan repayment choices for borrowers with federal student loans include standard loans with consistent payment amounts, graduated loans with smaller payments that gradually increase, and extended loan terms of 25 years. In addition, borrowers struggling to meet their minimum monthly payments and who are experiencing financial hardship may qualify for income-based and income-sensitive repayment options. These programs are only available to borrowers with federal student loans and are based on their income level.
For borrowers who are experiencing extreme financial difficulty and are unable to make any payments on their student loans, AES can discuss alternatives such as student loan forbearance and deferment. These options will essentially hold off a borrower’s obligation to pay on his or her student loans. However, interest may still accrue while they are in deferment or forbearance, and borrowers should speak to AES about their responsibility for this interest before signing up for these programs.
AES can also counsel borrowers about other options that may be available to them, such as student loan forgiveness programs for borrowers who work in the public service sector, or benefits for military veterans or active duty service members. Some borrowers may also be eligible to have their student loans discharged entirely due to total and permanent disability or through other programs. AES can provide advice to borrowers about the options and opportunities available to them based on their unique situation.
AES also offers repayment options for borrowers with private student loans. The company suggests that borrowers who are having difficulty meeting their monthly repayment obligation should contact them directly to discuss alternative repayment options for private student loans.
AES in the News
AES has recently been in the news due to its involvement with a lost paperwork scandal that may result in nearly $5 billion in student loans being erased. AES served as the student loan servicer for National Collegiate Student Loan Trusts, which holds 800,000 private student loans.
National Collegiate Student Loan Trusts is one of the largest owners of private student loans in the country, and AES was collecting student loan payments on their behalf. If borrowers defaulted on their loans, AES would send the loans to a bank and a complex debt collection process would begin. The problem was that neither National Collegiate Student Loan Trusts nor AES had the paperwork to prove that they owned the loans which resulted in judges dismissing the debt collection lawsuits against the borrowers.The failure to maintain proper paperwork for these loans may result in billions of dollars in student loans being discharged. National Collegiate Student Loan Trusts claims that AES was responsible for maintaining custody of this important paperwork. In response, AES has stated that it is not contractually obligated to maintain these documents and that it acted within the scope of its agreements.