[ericb]

American Student Assistance began as a traditional student loan guarantor that made more money when people defaulted--such is the payout structure in the student loan industry. They got paid for defaults, and paid for harassing people who defaulted.

Then they put together a program with the US government that made them money when they prevented people from defaulting, thus reversing the incentive. They built out reminder programs, tested, iterated and improved their default rate to one of the lowest in the industry.

Of course, the bush administration is ending the "Voluntary Flexible Agreement" program which made this possible.