Upromise to be sold to Sallie Mae?
SLM Corporation (aka 'Sallie Mae') has signed an initial agreement to acquire Upromise Inc. - pending regulatory approval - with the aim of uniting the college savings reward programme with Sallie Mae's education finance services.
Sallie Mae currently boasts some 10 million borrowing customers, while Upromise claims over 7 million members who use the programme to save for college funds. Upromise is also an administrator of direct-to-consumer 529 college savings plans, dealing with nearly 1 million college savings accounts and over US$10 billion in assets with tax-advantaged 529 investment options through partnerships.
Upromise offers its members the chance to link their account with any participating 529 plan so that their savings can be transferred automatically into their plan of choice on a regular basis. Launched in 2001, Upromise expects to grow its membership base for retail savings and 529 plans by more than 30% annually over the next five years.
Wider funding options If the purchase is approved, Sallie Mae and Upromise plan to offer parents and students a comprehensive financial package to provide easier access to college, including a range of investment options, financial aid information, college savings and student loan packages.
According to Tim Fitzpatrick, CEO for Sallie Mae, "In partnering with Upromise, we will be able to help families get a head start on saving for college." Tom Anderson, CEO for Upromise, added: "This will also allow Upromise to extend its relationship with families through college and beyond."
Under the terms of the agreement, Upromise would become a wholly owned subsidiary of SLM Corporation. Upromise, which employs approximately 250 individuals, would retain its separate brand identity, management team and offices.