visimoney
TLDR:
– Carlyle, a private equity firm, has entered the private student loan market by acquiring a $415 million student loan portfolio from Truist Financial and investing in a private student lender called Monogram.
– Banks have been retreating from private student lending due to difficulties in making profits in a heavily regulated small market, leaving a gap in student loan financing.
– Carlyle sees a strong opportunity to meet the demand for student loans as tuition costs rise and federal student loans fail to cover all expenses.
– Monogram works with banks and credit unions to offer student loans, providing compliance and customer-service expertise, while the partner banks offer loans that have a solid repayment track record and additional security.
– With Discover Financial Services also planning to exit the market, only a few major banks, including PNC Financial Services Group and Citizens Financial Group, will still offer private student loans.
Private equity firm Carlyle has announced its entry into the private student loan market, filling a gap left by major banks, which have been retreating from the sector. Carlyle will acquire a $415m student loan portfolio from Truist Financial and make a separate investment in private student lender Monogram. Despite difficulties in making profits in a heavily regulated market, Carlyle sees a strong opportunity due to students’ demand for loans to cover rising tuition costs. Carlyle’s investment in Monogram aims to help traditional financial institutions enter the student lending business by providing compliance and customer-service expertise. With Discover Financial Services also planning to exit the sector, only a few major banks, such as PNC Financial Services Group and Citizens Financial Group, will still offer private student loans.
