Two former Sallie Mae executives have started a new student loan financing company.
Joe DePaulo, the former executive vice president of banking and finance for Sallie Mae, and Tim Staley, the student loan corporation's former chief information officer and senior vice president, are the co-founders of College Ave Student Loans in Wilmington, Del.
The two former MBNA executives also were among the co-founders of Credit One Financial Solutions, a former Newark, Del.-based debt consolidation company.
The new company is the first college education loan provider to launch since 2011, according to Mark Kantrowitz, the publisher of online education resources provider Edvisors.com. The number of lenders offering private student loans during the recession dropped from about 60 to nearly a dozen commercial lenders and a similar number of state loan programs, he said.Angela Colatriano, the head of brand and product marketing at College Ave, which first began making private student loans in December, said the new company is approaching private student loan financing from a customer-focused viewpoint that provides the tools and information for making important financial decisions while investing in higher education.
The loans facilitated by College Ave. are backed by Ohio's Liberty Bank NA.
The variable interest rates for private student loans are based on credit scores and usually require a co-signer. Most experts say the loans should only be used to to bridge the gap between federal loans, grants and scholarships and the cost of tuition.
College Ave's school-certified student loans are available at annual percentage rates between 1.66 to 9.91 with no origination fees. Borrowers can choose to begin making payments on the principal and interest right away, and a 0.25% interest rate reduction is available for those who sign up for automatic payments.
College Ave. offers a a website that includes a student loan calculator to allow people to see how the loans work and determine whats right for them, Colatriano said.