Best way to refinance student loans Aberdeen

May 6, 2017
Worst Mortgage Refinancing

iHELP Logo 300Video: The 1st 25 Years

Originally, SLFC primarily provided capital and servicing for federally guaranteed student loans. Norg Sanderson, SLFC President/CEO says, “A big part of our strategy was that we would buy any loan at any time for any amount and at any status.” By doing so, SLFC provided the funding for South Dakota banks so they wouldn’t have liquidity issues, wouldn’t have to staff a student loan office or program, and wouldn’t have to see their good bank customers go down the street to a competitor.

That idea worked. In 1978, the volume of business was about $14 million. That had increased after one year to $25 million, and after four years, nearly $89 million. From 1978 through 2008, SLFC was able to provide college financing of over $4 billion to over 850, 000 borrowers.

Big Idea #2 – Convert From a Not-For-Profit to a For-Profit (1997)

In 1997, SLFC had another Big Idea—to convert the corporation from a not-for-profit to a for-profit that was owned by the employees (ESOP). The conversion required SLFC to repurpose its “surplus capital, ” which they did by setting up the Great Plains Education Foundation for $87, 500, 000. From 1997 to 2012, the foundation provided 208 grants for $38, 818, 423 to a variety of South Dakota educational endeavors.

SLFC35 Logo35 500"Success is a lousy teacher. It seduces smart people into thinking they can't lose.”
- Bill Gates

By 2004, business was going well for SLFC. “We were growing the company, we were providing the government program and our own private program, we were getting U.S. Bank more interested in what we were doing, and they were doing a lot more for us, ” says Steve Kohles, SLFC. A few years later, a series of external events created significant turmoil for SLFC: A joint venture was not working, a trustee became uncooperative, the CPA firm was not performing, audits weren’t completed in a timely matter, and SLFC was engaged in a lawsuit with six other secondary markets.

When it seemed like things couldn’t get any worse, the bond market crashed in 2008 which ended asset securitization, SLFC’s primary funding source. At the same time, the Federal government decided it would handle all student loans directly with the borrowers. “We were trying to pull out of a series of bad deals when we got hit with a worse one…no business model at all, ” says Norg Sanderson, President/CEO of SLFC.

For 30 years SLFC’s business had worked quite well. They paid premiums to lenders who marketed to borrowers and the guaranty agency that marketed to schools. It provided SLFC with a model that was so simple and worked so well that no one imagined it could stop so abruptly. But it did.

Big Idea #3 – Provide “Gap” Financing and College Planning Services (2008)

In 2008, SLFC was left with a company that was struggling to get back to normal once normalcy had ended. They knew if they were going to survive they would have to come up with a brand new business concept. SLFC shifted its emphasis to providing and servicing private student loans. For the first time in SLFC’s history, it had to become a marketing company because the capital sources it formerly relied upon had been destroyed. The new idea was to start a private loan program using capital from private banks. SLFC changed its focus and allied with the Community Banks. It was called the iHELP Student Loan Program.

“2008 was so similar to 1978. There were times in 1978 when we were starting Student Loan Finance Corporation that we did not sleep, wondering if we're going to make it the next day, ” says Sanderson. He adds, “2008 was exactly the same position as we were in during '78. We were a start up with 30 years of experience, but having that 1978 experience gave us the courage to say we can do this again.”

“Whether you think you can, or you think you can’t – you’re right.”

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