The nation’s largest provider of federal student loans SLM Corp., otherwise known as Sallie Mae, plans to acquire Upromise, Inc., which offers a loyalty-reward program that lets consumers earn money for college tuition when they buy participating brands.
The purchase price was not disclosed.
Sallie Mae has about 10 million customers while Upromise, which launched in 2001, has more than 7 million members. Members link their Upromise account to a 529 college savings plan. Upromise has administered close to 1 million college-savings accounts and more than $10 billion in assets with tax-advantaged 529 investment options.
More than 100 national companies, 8,000 restaurants, 10,000 hotels and 400 online retailers participate in the Upromise rewards program. The brand partners include American Airlines, Bed Bath & Beyond, Coca-Cola, Eddie Bauer, Exxon, McDonald’s, New York Life Insurance, the Sharper Image and Whirlpool.
Under the deal, the two companies plan to offer parents and students a comprehensive financial package toward college. Upromise will become a wholly owned subsidiary of SLM Corp. and retain its brand identity.
“Upromise’s savings plans, when linked with the purchasing power of their rewards program, provide tremendous incentives to help save for a college education,” said Tim Fitzpatrick, CEO Sallie Mae, in a statement. “In partnering with Upromise, we will be able to help families get a jumpstart on saving for college.”
Upromise employs about 250 people. Its management team and operations will continue in Needham, MA. Sallie Mae works with 6,000 colleges and universities, as well as scholarship organizations.
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