Who Are Top 10 Originators of Federal Student Loans?

Here are the top 10 originators of federal student loans, as measured by new guarantees in FY09 (in millions of dollars): 

				Annual
LENDER		FY09	FY08	Change
SLM CORPORATION (SALLIE MAE)		$20,990	$14,266	47%
WELLS FARGO/WACHOVIA		$10,688	$9,063	18%
CITIBANK, STUDENT LOAN CORP		$5,870	$6,201	-5%
BANK OF AMERICA		$4,921	$4,275	15%
JPMORGAN CHASE BANK		$3,548	$3,418	4%
PITTSBURGH NATIONAL CORP (PNC)		$2,656	$1,269	109%
U S BANK		$2,262	$2,278	-1%
DISCOVER BANK		$1,726	$245	605%
EDAMERICA		$1,563	$1,614	-3%
NATIONAL ED LOAN NETWORK (NELNET)		$1,557	$1,022	52%
TOP 10 TOTAL		$55,781	$43,650
TOTAL FFELP Originations		$72,663	$63,210	15%

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Observations:

• Sallie Mae extended the distance between themselves and the rest of the field with a 47% surge in new guarantees which gives them a market share of 29%.  This surge has long term benefits for Sallie Mae on the servicing side too.  As one of the four companies selected to service loans sold to the Department of Education, Sallie will continue to service their own loans given the Dept.'s desire to avoid split servicing any of the loans put to them. 
  
  • Since 2007, Sallie Mae has more than doubled their federal loan originations from $9.0 billion to $21.0. 

• The consolidation of the FFELP originators continued in FY09 with the top 10 now representing 76.8% of all new guarantees vs. 71.9% in FY08 (Note:  Wells Fargo/Wachovia data was combined since WF acquired Wachovia in late 2008).  The top 100 originators now constitute 98.1% of all new guarantees vs. 95.7% in FY08.  So, the next time someone tells you that 2000 banks are making federal loans...well, almost all of the volume is coming from the top 100. 

• On a percentage basis, Discover (605% increase) and PNC (109%) had the largest increases among the top 10 originators. 

Comments

[feudi]

Sallie Mae is using the federal loan program as a loss leader to rope in students to take out private loans at rates up to 13% and loan fees up to 5%. The feds need to regulate the private loan side of the business. At these rates, at the very least, people with private education loans should have bankruptcy protection.

[Barry Goldwater]

Check this article:

The coming melt-down in higher education (as seen by a marketer)

[Barry Goldwater]

The coming melt-down in higher education (as seen by a marketer)

http://sethgodin.typepad.com/seths_blog/2010/04/the-coming-meltdown-in-higher-education-as-seen-by-a-marketer.html