Affiliated Computer Services (ACS) provided some commentary on the strength of their student loan business during their 4Q conference call today (thanks to Seeking Alpha for their transcript). The comments, while somewhat cryptic, seem to indicate they are gaining share in a challenging marketplace.
Here were their student loan specific comments:
- Commercial student loan platform has had recent customer wins:
- "For example, investments in our commercial student loan platform have allowed us to win new business." Here is a description of the services they provide to student lenders found on their website:
ACS offers fully integrated, self-service Web access to lenders and Financial Aid Administrators (FAA’s) as well as to student and parent borrowers at all phases of the loan process - from origination through repayment. With the cutting-edge systems and services of ACS, borrowers can make real-time transactions such as applying for loans, applying for a deferment or forbearance, accessing tax information, and making payments; FAA’s and lenders can access and input information, post transactions and make updates in real-time.
Because our lender clients and their schools have different needs, ACS customizes application and disbursement methods to fit those needs. ACS supports loan applications submitted via phone, Web, or paper. We can disburse funds through a variety of methods. In short, we work with you to develop, implement and manage an application process that satisfies both your needs and those of your school clients.
Our independent status ensures that lenders receive the most competitive loan sale premiums for their portfolios, and that schools and students receive premium service and advanced Web-based tools to simplify loan management and repayment. Our priority is to help you maximize your business in student loans, and to provide you with the highest caliber service and range of capabilities available to support you, your schools, and your borrowers.
At ACS, we don’t believe that competing with our partners makes good business sense. In fact, we feel it contradicts the very nature of being a partner. Unlike other loan servicing providers, ACS does not originate, acquire or otherwise hold student loan assets. ACS is a partner, not a competitor.
Department of Education relationship remains strong:
- "We continue to leverage our student loan processing solution with
Department of Education (hmm, leverage is one of those business words really doesn't tell us much)"
- I might read this to mean that the Direct Lending program has benefited by a significant growth (over 50%) in loan originations in the last year which is serviced by A.C.S.
- "We continue to leverage our student loan processing solution with Department of Education (hmm, leverage is one of those business words really doesn't tell us much)"
- More good news about the commercial student loan business:
- "...our commercial student loan area has had some very good results. In all of those, as we especially in our areas of our, like commercial student loans, we've always talked about the one to many model that we have. So when we can add additional portfolios to a base business like commercial student loans, the incremental margins are very attractive and it has resulted in better margins in commercial."