Is First Marblehead coming back into the k-12 private school loan business?
We’ve been hearing about this since April when they halted all k-12 student loans. Recently, they secured financing for their student loan business from Goldman Sachs. The private equity arm of GS, GS Capital Partners, invested approx $130 million.
First Marblehead was previously funded through Bank of America, but lost the financing in the spring. At that time, they closed the prepgate loan program. This loan program was essential to the private school business. Then SallieMae announced they would stop k-12 private school loans as well on Aug. 22nd. The two combined has caused quite a stir in the private school industry.
The verdict is still out on whether First Marblehead will resume the prepgate loan program – the website still says they aren’t taking loan apps. We’re going to keep an eye on it and see if they come back into the business. This would be great for smaller private schools. A large portion of those seeking a private school education will obtain a student loan for their child. This enables them to preserve cash and leave assets as they are.
KeyBank is another major player in the student loan business, but we haven’t heard any announcements from them. No word on cutbacks, losses, etc. They originate loans through their Achiever Loan program.
If you need to fund a private school education – you can try a home equity line of credit or if you have equity in your auto – you might be able to refinance and take some cash out.
Good luck!
