Newton-based Silver Sword Capital Partners, which advises banks and credit unions on opportunities in education finance solutions, has facilitated a deal that will partner AAA Mid-Atlantic with Sallie Mae to offer a student loan program for undergraduate and graduate students.
"With the federal student loan programs being transitioned back to the government, we still wanted to be able to help our members meet the rising cost of higher education," said Scott Hunter, director of distribution for AAA Mid-Atlantic Financial Services. "The Sallie Mae Smart Option Student Loan was one of the best we looked at for its accessibility to the members and simplicity of implementation for us."
According to a recent survey, demand for private student loans has never been higher as most of the major players left the space when the securitization markets dried up in 2008. Additionally, American families have seen the traditional means of extra college money disappear. Lenders are seeing the value in programs like Sallie Mae’s Smart Option Student Loan, which allows banks, credit unions and affinity groups to offer student loans without assuming any risk on their balance sheets, according to a statement.
"The timing of the AAA Mid-Atlantic program is perfect because admissions letters have already started arriving and before you know it, tuition bills will follow," said Michael Mullowney, managing partner at Silver Sword. "There is an opportunity here for any organization that is a good marketer, which AAA Mid-Atlantic certainly is."
In less than one year of working to secure referral lending partners to offer this program, Silver Sword has begun to see interest in it take off. Silver Sword has closed more deals in April than it had in all of the previous quarter, and the company said interest in these low-risk products is really catching on.
"We expected interest in these referral lending programs, but not like we are starting to see," said Mullowney. "We will secure in four months what we had hoped to do in all of 2010, and the pickup in our pipeline has us looking to add staff."
