SLA Private Student Loan Market Share Estimates (Update 4)

Review posts below for information regarding the Education Finance Partners and Campus Door announcements earlier today. 

The previous post indicated that Education Finance Partners was the 4th largest private student lender, which got me thinking...why isn't there a list available identifying top private student lenders.  I had been working on this project for some time and the events of today encouraged me to complete it (good motivation for a Friday afternoon).  This is quite a bit more challenging than finding the largest FFELP (Federal Family Education Loan Program) lenders as that information is published by the Department of Education on an annual basis.  But have no fear, where there is a will there is a way.  Scouring 10-Ks, 10-Qs, press releases, news articles and securitization filings here was the most complete list of the top Private Student Lenders.  This list accounts for over 80% of total private loan volume of $17.1 Billion, as estimated by College Board for 2006-07.

		Estimated
Lender	2007 Originations	Market Share
Sallie Mae	$7.267 billion	42.5%
Citibank	$1.8 billion	10.5%
Chase	$1.106 billion	6.5%
EFP	$720 million	4.2%
Bank of America	$700 million	4.1%
Campus Door	$500 - $600 million	2.9 - 3.5%
KeyCorp	$450 - $500 million	2.6 - 2.9%
Astrive (FMD)	$450 - $500 million	2.6 - 2.9%
My Rich Uncle	$227.3 million	1.3%
Nelnet	$110.5 million	0.6%

Source:  Company filings, press releases, securitization filings, news articles and SLA estimates.

Here are the sources and caveats for this information:

• Important:  The list above is incomplete as it excludes private student lenders such as Wells Fargo, Wachovia (no longer making private loans to undergraduates), Edamerica, US Bank and SunTrust for whom no publicly available information on student loan volumes was available.  SLA is currently requesting estimates from these lenders.  Check back as the list will be updated as new information is available.
  

• Chase, Astrive, Bank of America and KeyCorp volumes based on securitization filings and therefore would not include any private loans that these institutions retained on their balance sheets.  In addition, the 4 First Marblehead securitizations in 2007 and one KeyCorp securitization in 2006 assumed to correspond to 12 month period.  Assumes that loans being securitized are primarily new originations versus loans that had been held from previous year securitizations.
  

• Sallie Mae in 2007 reported total loan volume of $7.915 billion (total above only includes Sallie Mae Internal Brands)
  

• Their 10-K on page 82 indicates the following breakdown for private preferred channel loan originations for the 2007 fiscal year:
  
  Sallie Mae Internal Brands:  $7.267 billion
  Other Lender Partners         $0.501 billion
  JP Morgan Chase                $0.147 billion
  TOTAL                                $7.915 billion
  
  
  

• Citibank reported new CitiAssist Loan commitments of $1.8 billion

• The Student Loan Corporation (an 80% owned subsidiary of Citibank) indicated in their press release announcing their 4Q and full year 2007 results that "The Company also made new CitiAssist Loan commitments of $1.8 billion, down 1% compared to last year, due largely to the shift in volume to the Graduate PLUS loan product which was introduced last year."

• JPMorgan Chase sold $1.106 billion in student loans in 2007 to National Collegiate Student Loan Trusts 1 to 4 based on First Marblehead securitization transactions which were completed in February, May and September of 2007. 
  

• Since EFP indicated that they were the 4th largest private lender in a recent press release that would suggest loan volumes between $750 million and $1.1 billion, based on SLA estimates for the 3rd and 5th largest private lenders.  The SF Chronicle indicated in a recent article that EFP had originated $720 million in loans in 2007. 
   
• Bank of America sold $595 million in student loans to the National Collegiate Student Loan Trusts in 2007.  Bank of America indicated in April 2008 that private lending was less than 15% of their $6 billion student loan business so private loans could be as high as $900 million.  SLA used midpoint of $750 million for its estimate.    

• First Marblehead's 2007 10-K indicated that Astrive "represented approximately 12% of our total revenue for fiscal 2007.  First Marblehead's revenues are driven by the volume of loans they securitize.  The same 10-K indicated that Bank of America represented 15% of their total revenue.  So, Astrive would appear to be approximately 80% of Bank of America's loan volume of $595 million leading to an estimate of $450-$500 million in loan volume for Astrive.  

• KeyCorp in a 2006 Prospectus for their KeyCorp Student Loan Trust 2006-A sold $733.5 million dollars of private student loans into the trust, which included $159.2 million of private loans originated by Campus Door (relationship ended in 2006).  KeyCorp had a history of one securitization per year, however they were not able to execute a securitization given the challenging environment late in 2007.


• In coming up with an estimate for 2007, it is important to note that Key sold $134.7 million in private graduate loans (dental, law in medical) in 2006 into the trust.  This private graduate loan volume was likely reduced significantly given the Grad PLUS program.  Assuming a 70% reduction and minimal growth in undergraduate volume yields a 2007 estimate of $450-$500 million.

• My Rich Uncle originated $227.3 million in private loans for calendar year 2007 based on a recent 10-Q filing.

• Nelnet reported $110.5 million in private loan originations for calendar year 2007 based on the latest 10-K filing.

• Update 2:  Added loan volume data on Astrive after reviewing First Marblehead 10-K which indicated that Charter One Bank, a division of RBC Citizen's funded Astrive loans.  Removed RBC Citizen's since more than 50% of RBC Citizen's volume estimated to be derived from funding Astrive originations.  

• Update 3:  Increased estimate for Bank of America after finding a reference from the Bank that private loans represented less than 15% of their total student loan volume of $6 billion.  Adjusted EFP based on change to Bank of America figures.

• Update 4:  Updated volumes for Education Finance Partners to $720 million based on SF Chronicle article.  Adjusted Bank of America estimated volume to $700 million.

Comments

[clitoral orgasm]

Hi!! I really enjoy reading your blog is very fresh, hope you keep writing. Read you soon.

[vertigo symptoms]

I have this issue up with an estimate for 2007, it is important to note that Key sold $134.7 million in private graduate loans (dental, law in medical) in 2006 into the trust ,what do you recomend?