), also known as Sallie Mae, announced the sale of its Campus
Solutions business to
Higher One Holdings, Inc.
). The all-cash deal is valued at approximately $47.25 million.
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Sallie Mae's Campus Solutions unit provides business-to-business
services, which comprise e-Commerce and billing payment services,
refund disbursement services, and tuition payment plan management
to country-wide business offices of colleges and universities.
Founded in 2000, Higher One is a chief financial services
provider to colleges and universities. Further, it offers data
analytics solutions. With its diverse range of services, Higher
One specializes in enhancing administrative efficiencies and
reducing fraud, and helps lower the expenses of higher education.
For Higher One, the acquisition of Sallie Mae's Campus Solutions
will be beneficial because the latter has a trusted client-base
in institutions across the country. Additionally, the Campus
Solutions unit has a proven track record and years of expertise
in financial assistance and payment solutions. The Campus
Solutions portfolio will be a value addition to the wide range of
products and services of Higher One. With the completion of the
agreement, Higher One expects to continue offering its customers
the refund disbursement services, payment processing services and
data analytics solutions of the highest quality.
Sallie Mae's sale of the Campus Solutions segment reflects the
company's efforts to bolster its revenues by focusing on its
consumer segment consisting of retail products and services that
directly help students and families plan and reduce costs of
The suspension of the new federal student loan origination, in
compliance with the legislation passed by both the House and the
Senate in 2012, will continue be a revenue headwind for Sallie
Mae. However, we believe that the company's efforts to support
its earnings by the expansion of its private education loan
business and reduction of its loan loss provision expenses are
Despite challenges, Sallie Mae's leading position in the student
lending market, diversifying efforts and increasing private
student loan originations will help the company navigate the
sluggish macroeconomic environment.
Sallie Mae currently carries a Zacks Rank #3 (Hold). Financial
stocks that are performing better than Sallie Mae include
), both of which carry a Zacks Rank #1 (Strong Buy).