SunTrustBanks Inc. has broadened its relationship with First Marblehead Corp., a third-party administrator of student lending activities.
By the end of the third quarter, SunTrust will make all new student loans in conjunction with First Marblehead, according to a press release issued Tuesday. The deal extends their existing partnership until 2015 and increases the amount of lending they may do together.
First Marblehead will design SunTrust's student loan program and provide sales and marketing, processing, portfolio management and administrative services to the $165.8 billion-asset SunTrust, which is the lender.
First Marblehead, of Boston, announced in April 2010 that it had entered into an agreement with SunTrust to process and manage the Atlanta banking company's student loans. That deal was to have expired next year.
The private student loan business has gone through a number of changes within the last few years as many private lenders offering student loans have exited the market. Additionally, in 2010, the federal government ended subsidies to banks that participated in the Federal Family Education Loan Program.