Sallie Mae will reach college-bound kids earlier and serve them longer when it completes its purchase of UPromise later this summer.
College-loan leader SLM Corp., known widely as Sallie Mae, announced last week that it will buy coalition loyalty program UPromise for an undisclosed amount. The purchase marries UPromise’s college-savings program with Sallie Mae’s loan business, steering younger families that account for much of UPromise’s 7.2 million members towards Sallie Mae’s portfolio as they age. The deal is expected to close by September.
Meanwhile, Needham, MA-based UPromise is readying a pilot program for school fundraising; the test begins this fall in Houston. Families in the Houston Independent School District can designate their local school to receive a portion of rebates in the family’s UPromise account. UPromise members designate the school and the percentage; donations will be made automatically. “You’re not cutting out box tops or selling gift wrap; donations go to the school through a seamless process,” Rochon said. UPromise will roll out the program if it does well in Houston, the seventh-largest school district in the U.S. with 306 schools and 210,000 students.
UPromise projects the Sallie Mae merger will boost its membership base 30% per year through 2011. Sallie Mae graduates, ready to start UPromise accounts for their own children, will be part of that, said UPromise senior VP-partner management David Rochon.
“Sallie Mae has 12 million customers now with student loans. Their goal is to have those customers become UPromise members,” Rochon said. “We see a way to double our membership in short order, by having Sallie Mae customers join UPromise to save for their own kids.”
Sallie Mae’s financial services, including college-planning seminars, also gives UPromise more financial-planning credibility. “We can become a bigger more trusted resource through the entire process,” Rochon said.
UPromise’s marketing partners—primarily packaged goods brands, and retailers—have had “overwhelmingly positive response” to the merger, Rochon says. “We’re more relevant to more consumers, at their life stage. We become a gatekeeper brand, which makes us more meaningful to our families; then partner brands become elevated with ours.”
Upromise will become a wholly owned subsidiary of Sallie Mae, but keep its current management and headquarters. Five-year-old UPromise has 450 partner brands and retailers, reaching 23,000 supermarkets and drug stores. Retailers get a weekly tally of contributions made to local shoppers’ UPromise accounts, to post in-store.
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