Philadelphia, PA (PRWEB) March 9, 2011
SAGE Scholars, Inc., in partnership with National Education, announces a new student lending program for private colleges & universities.
The “SAGE Tuition Loan Program” — “SAGE TLP” — is designed to help participating colleges increase net tuition revenue, lower discount rates and promote student retention.
SAGE TLP is an innovative “hybrid” program attractive to colleges because it has zero cost, is low cost for families (less than 1% APR), generates cash flow and provides third party loan management, relieving colleges of both administrative burden and compliance risk. Colleges make no capital investment and pay no administrative costs.
Participating colleges will be able to replace a portion of the tuition discounts normally issued to incoming freshmen with the SAGE TLP, converting the discounts to an asset that will eventually provide cash flow. A low-cost loan to students – less than 1% APR with all benefits obtained – replaces a portion of the merit aid that colleges currently provide. Creating a receivable to replace aid allows a college to “recapture the discount”. As some schools have pointed out, this is “found money!”
The program does NOT affect a college’s current cash flows from other sources, such as loans, federal aid, state aid and direct payment from families.
Wesley College, which has signed up with National Education, says it is replacing some grants with loans in financial aid packages for about 20% of incoming freshmen – a decision that will forestall further cutbacks in its budget and existing grants, says Eric Nelson, vice president for finance at Wesley. (source: smartmoney.com)
Colleges can use SAGE TLP as an enhanced retention tool – when changed circumstances imperil a current student’s continued attendance. A college can respond by offering SAGE TLP instead of an increased discount. Repayment can be deferred until after graduation, and a 25% forgiveness benefit will be warmly received by the student and his/her family. Colleges are able to dictate the allocation between the graduation benefit and the on-time payment benefit.
Loans can be made regardless of FICO score, giving the college the flexibility to include the product in award letters. However, only credit-ready loans will be offered in potential securitizations. Early-adopting institutions will have a guaranteed cash flow for all credit-ready loans made.
Wesley College (Dover, DE) is the first SAGE member college to agree to participate. With just under 2,000 students, Wesley has put itself in position to potentially recapture nearly $ 1,500,000 in tuition revenue over the next five years.
How much tuition revenue can an institution recapture using SAGE TLP? In addition to showing projected revenue that can be recaptured, colleges can see how this revenue equates to the number of full-paying students by visiting the on-line calculator on the National Education website.
SAGE Scholars, Inc., established in 1995, has created the nation’s largest private college savings program, with more than 190,000 participating students and 276 participating colleges (45 states) in its enrollment marketing consortium. Families who save in programs such as the Pennsylvania and Wisconsin state 529 Plans are rewarded with Tuition Reward Points – similar to frequent flyer miles – that can be redeemed for guaranteed minimum discounts if students are admitted to and attend a member college, beginning with the freshman year.
National Education, established in 1988, is a financial solution company sharply focused on developing, marketing, originating and servicing education financial products. National Education has received the “Exceptional Performer” designation from the U.S. Department of Education.
For more information, contact:
Matt Scotty at 800.345.4325 ext 5173, President, National Education Servicing
Jeff Hubbard at 800.345.4325 ext 5601, Senior Vice President, National Education Servicing
Dr. Jim Johnston at 215.564.9930, CEO, SAGE Scholars, Inc.
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