Chase Manhattan Corp. and BankBoston Corp. are among the lenders that have agreed to participate in a new Internet-based loan management system developed by Sallie Mae.
The secondary-market student loan agency said the system, dubbed Laureate, will shorten the application and funding process to 24 hours from one to three weeks.
Sallie Mae hopes to enlist as many of its 500 lending partners as it can for Laureate, which is to go into operation Thursday. Such banks make loans to students and sell some or all of them to Sallie Mae, which manages about $47 billion, primarily under the Federal Family Education Loan Program.
Laureate will help BankBoston increase its market share, said Rich Archibald, its director of education loan marketing. BankBoston originates about $400 million of student loans each year.
"Schools are looking to provide loan funds for students as painlessly as possible," he said. "Being Web-based, Laureate is the most convenient way to transfer loan data."
Mr. Archibald said an added advantage for participating lenders is that they don't have to make an investment in technology. They will pay an undisclosed fee for each loan originated through Laureate.
"The key to growing market share is the loan delivery process-how quickly, how efficiently, and what level of customer service that can be delivered to schools and students," said Paul Carey, executive vice president of Sallie Mae.
Increasing that share is important for lenders who face competition from the federal government, which serves as a direct lender under a program initiated in 1993. Universities that sign up for the direct program deny banks the business they would enjoy under the Federal Family Education Loan Program.
"Laureate is part of the tools we use for making the FFELP program more competitive," said Mr. Archibald.
Students using the system will log on to their universities' financial aid Web sites and click on a link to Laureate. They can use any common Internet browser to complete a loan application.
Selecting from lending banks that have teamed with Sallie Mae, students can avoid the time-consuming process of sending applications through the mail. Banks could approve loan applications in minutes and universities can make loan funds available within 24 hours.
Sallie Mae touts Laureate, which it developed at a cost of less than $20 million with Sapient Corp. of Cambridge, Mass., as the first Web-based system that integrates all of the stages of the student loan process.