ICBA News Release
ICBA Director of Communications
Daniel P. Clancy
ICBA Director of Services
FOR IMMEDIATE RELEASE
ICBA and SLFC Renew Contract
New Agreement Offers Improved Borrower Benefits for Community Bank Student Loans
Washington, D.C. (March 9, 2005) - Independent Community Bankers of America (ICBA), the nation's largest banking trade organization, and Student Loan Finance Corporation (SLFC), a recognized leader as both a servicer and a secondary market for student loans, have renewed their agreement to provide a total education lending solution to community banks.
"BrainScratch," the student loan program, was introduced to ICBA members in 2001. It provides a turnkey web portal for student loan origination, marketing and servicing. Four years into the program, more than 300 community banks have signed agreements to participate. In 2004 alone, active participants generated $5.29 million in student loan volume.
"One objective for the new agreement was to help community banks drive loan volume and generate fee income," said Dan Clancy, director of services for ICBA. "SLFC has met this objective by developing enhanced borrower benefits that students can realize in the repayment stage. A borrower benefit equal to a 2 percent principal reduction after 24 on-time payments will be effective as of July 1 of this year."
Joy Nipe, Managing Director, Sales and Marketing, said that SLFC intends to have very competitive loan products to offer community banks, along with enhanced marketing support. Nipe added, "The guaranteed Federal Family Education Loan Program (FFELP) is expected to exceed $63 billion in 2005, so you can imagine the potential."
SLFC can also help community banks offer students consolidation loans. Students with multiple loans nearing the repayment stage can save money by consolidating them into one fixed rate loan with a single monthly payment.
Fee income, the private label feature, and the ability for the community bank to act as a full service bank by maintaining contact with students and parents in the community, cross-selling opportunities, and attracting new customers are just a few of the reasons why SLFC is an ideal solution for community banks.