Student Loan and Guaranty Servicing
The primary service offerings of this operating segment include:
Servicing federally-owned student loans for the Department
Servicing FFELP loans
Marketing, originating, and servicing private education loans
Servicing and outsourcing services for FFELP guaranty agencies, including FFELP
guaranty collection services
Providing student loan servicing software and other information technology products
and services
Providing outsourced services including call center, processing, and marketing
services
Servicing FFELP loans
The Student Loan and Guaranty Servicing operating segment provides for the servicing
of the Company's student loan portfolio and the portfolios of third parties.
The loan servicing activities include loan conversion activities, application
processing, borrower updates, customer service, payment processing, due diligence
procedures, funds management reconciliations, and claim processing. These activities
are performed internally for the Company's portfolio, in addition to generating
external fee revenue when performed for third-party clients.
The Company's student loan servicing division uses proprietary systems to manage
the servicing process. These systems provide for automated compliance with most
of the federal student loan regulations adopted under Title IV of the Higher
Education Act of 1965, as amended (the “Higher Education Act”).
Loan servicing
The principal competitor for existing and prospective FFELP and private education
loan servicing business is Navient Corporation ("Navient"). Navient
is the largest for-profit provider of servicing functions, as well as one of
the largest service providers for private education loans. In contrast to its
competitors, the Company has segmented its private education loan servicing
on a distinct platform, created specifically to meet the needs of private education
student loan borrowers, their families, the schools they attend, and the lenders
who serve them. This ensures access to specialized teams with a dedicated focus
on servicing these borrowers.
With the elimination of new loan originations under the FFEL Program, four servicers,
including the Company, were named by the Department in 2009 as servicers of
federally-owned loans. The three other servicers are Great Lakes Educational
Loan Services Inc. (“Great Lakes”), FedLoan Servicing (Pennsylvania
Higher Education Assistance Agency (“PHEAA”)), and Navient. In addition,
the Department has contracts with 31 NFP entities to service student loans that
are serviced by six prime servicers. These NFP entities were authorized in 2012
to begin servicing loans for existing borrower accounts. While previously these
entities have only serviced existing loans, effective January 1, 2015 they began
to receive a portion of new borrower loan activity. The Company currently licenses
its hosted servicing software to four prime servicers that represent 13 NFP
organizations. PHEAA is the only other TIVAS servicer offering a hosted Federal
Direct Loan Program servicing solution to the NFP servicers.
K-12
In the K-12 market, the Company offers tuition management services, school
information systems, and assistance with financial needs assessment and donor
management. The Company provides services for almost 9,400 K-12 schools and
serves over 2.3 million students and families.
The Company is the market leader in actively managed tuition payment plans.
Tuition management services include payment plan administration, incidental
billing, accounts receivable management, and record keeping. K-12 educational
institutions contract with the Company to administer deferred payment plans
that allow families to make monthly payments over 6 to 12 months. The Company
collects a fee from either the institution or the payer as an administration
fee.
The Company's financial needs assessment service helps K-12 schools evaluate
and determine the amount of financial aid to disburse to the families it serves.
The Company's donor services allow schools to assess and deliver strategic fundraising
solutions using the latest technology.
Higher Education
The Company offers two principal products to the higher education market: actively
managed tuition payment plans, and campus commerce technologies and payment
processing. The Company provides service for almost 800 colleges and universities
world-wide and serves over 6.8 million students and families.
Higher education institutions contract with the Company to administer actively
managed payment plans that allow the student and family to make monthly payments
on either a semester or annual basis. The Company collects a fee from the student
or family as an administration fee.
The Company's suite of campus commerce solutions provides services that allow
for families' electronic billing and payment of campus charges. Campus commerce
includes cashiering for face-to-face transactions, campus-wide commerce management,
and refunds management, among other activities. The Company earns revenue for
e-billing, hosting and maintenance, credit card processing fees, and e-payment
transaction fees, which are powered by the Company's QuikPAY system, a secure
payment processing engine.
QuikPAY, a campus commerce product, is sold as a subscription service to colleges
and universities. QuikPAY processes payments through the appropriate channels
in the banking or credit card networks to make deposits into the client's bank
account. It can be further deployed to other departments around campus as requested
(e.g., application fees, alumni giving, parking, events, etc.).
Asset Generation and Management
The Asset Generation and Management operating segment includes the acquisition,
management, and ownership of the Company's student loan assets. The student
loan assets are held in a series of education lending subsidiaries and associated
securitization trusts designed specifically for this purpose. In addition to
the student loan spread earned on its portfolio, all costs and activity associated
with managing the portfolio, such as servicing of the assets and debt maintenance,
are included in this segment.
Telecommunications
Allo derives its revenue primarily from the sale of advanced telecommunication
services, including internet, television, and telephone services, to residential
and business customers in Nebraska, and specializes in high-speed internet services
available through its all-fiber network. Allo currently serves the Scottsbluff,
Gering, Bridgeport, North Platte, Ogallala, and Alliance communities in Nebraska.
In November 2015, Allo announced plans to expand its network to make services
available to substantially all commercial and residential premises in Lincoln,
Nebraska, and currently plans to expand to additional communities in Nebraska
and surrounding states over the next several years.
Internet and television services
Internet, broadband, and television services include data and video products
and services to residential and business subscribers. Allo data services provide
high-speed internet access over Allo's all-fiber network at various symmetrical
speeds up to 1 gigabit per second, depending on the nature of the network facilities
that are available, the level of service selected, and the geographic market
availability. Allo also offers a variety of data connectivity services in select
markets, including Ethernet services capable of connecting multiple connections
over Allo's fiber-based networks. Depending on geographic market availability,
Allo's Internet Protocol Television Video ("IPTV") services range
from limited basic service to advanced television, which includes several plans
each with hundreds of local, national, and music channels, including premium
and pay-per-view channels, as well as video on demand service. Subscribers may
also subscribe to Allo's advanced video services, which consist of high-definition
television, digital video recorders (“DVR”), and/or a whole home
DVR. Allo's whole home DVR gives customers the ability to watch recorded shows
on any television in the house, record multiple shows at one time, and utilize
an intuitive on-screen guide and user interface.
Allo expects that internet, broadband, and television services will continue
to increase as a more significant component of its overall services, and offset
the anticipated decline in traditional residential telephone services, which
continue to be impacted by the industry-wide decline in access lines.
Telephone services
Local calling services include a full suite of telephone services, including
basic services, primary rate interface ("PRI"), and session initiation
protocol ("SIP"). Allo's service plans include options for voice-mail
and other enhanced custom calling features including hunting, caller ID, call
forwarding, call waiting, among others. Services are charged at a fixed monthly
rate or can be bundled with selected services at a discounted rate. Allo provides
a hosted PBX package, which utilizes a soft switch and allows the customer the
flexibility of utilizing new telephone technology and features without investing
in a new telephone system. The package bundles local service, calling features,
and internet protocol (“IP”) business telephones.
Long-distance services include traditional domestic and international long
distance which enables customers to make calls that terminate outside their
local calling area. These services also include toll free calls and conference
calling. Allo offers a variety of long-distance plans, including unlimited flat-rate
calling plans, and offers a combination of subscription and usage fees.