GW TO SELL STUDENT LOAN DEPARTMENT.Byline: Gregory J. Wilcox Wilcox may refer to: Place names in the United States
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Chatsworth-based Great Western Financial Corp. is selling its student loan operation to a Virginia Virginia, state, United States
Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). bank, the companies announced Wednesday Wednesday: see week. .
Terms of the deal with Crestar Bank were not announced but it includes Great Western's $370 million student loan portfolio. Great Western expects to realize an after-tax net gain of $13.8 million on the sale in the fourth quarter of 1996.
Great Western's loans are held primarily by students in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). and Florida but they are not likely to feel any paperwork impact from the acquisition by Crestar.
``Anyone who has a student loan with Great Western doesn't have to do anything. Their loan will automatically transfer over to Crestar,'' said Great Western spokesman Charles Coleman For the American murderer, see .
Charles Coleman (circa 1807, Pontefract–circa 1874, Rome) was an English painter.
In 1835, Coleman went to Rome to study the paintings of Michelangelo and Raphael. .
About 10 people work in Great Western's student loan unit and their job status is unclear at this point.
``We anticipate on keeping as many as we can but we haven't made that determination yet,'' said Tony Mattera, spokesman for Richmond-based Crestar.
The deal matches up with the business strategies at both financial companies. Great Western is becoming more of a consumer bank and is focusing on products such as home equity loans, new and used auto loans, and small business loans.
Student loans accounted for less than 1 percent of the Great Western's $43.5 billion in assets.
The unit was ``marginally profitable'' and securing ``acceptable returns would have required a substantial capital investment with an uncertain payback period Payback Period
The length of time required to recover the cost of an investment.
Calculated as: ,'' said John F. Maher, Great Western's president and chief executive officer.
Crestar, on the other hand, wanted to expand its student loan business and this acquisition increases its portfolio to nearly $900 million.
Banking industry analyst Gary Gordon Master Sgt. Gary Ivan Gordon (August 30, 1960–October 3, 1993) is a posthumous recipient of the Medal of Honor. At the time of his death, he was a non-commissioned officer in the United States Army's special operations unit, the 1st Special Forces Operational Detachment-Delta at PaineWebber said that this business line can be profitable but is labor-intensive.
``Servicing is very difficult. You've got this big book of government regulations you have to follow to collect loans,'' he said. ``You're told how to collect them rather than going out and doing it yourself, so that can be expensive.''
Loan amounts can range from a maximum of $2,625 per year for first-year students up to $18,500 per year for graduate students. Financial need can determine the loan amount.
The current interest rate is 7.66 percent and is adjusted annually. It is capped at 8.25 percent, said Crestar spokeswoman Catherine Matawaran.
Students have a maximum of 10 years to repay the loan with payments starting six months after earning their degree.
Students in Great Western's service territory can still apply for loans by calling (800) 552-3006 or accessing Crestar's Web site at www.student-loans.com.
``They couldn't do the actual transaction through the Web site but they could get all the documentation and information they need,'' said Mattera.
Crestar Bank is a unit of Crestar Financial Corp., which has $18.5 billion in assets. The company has 379 offices in Virginia, Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , as well as through a variety of electronic delivery channels.
Great Western is a diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services company with 1,150 mortgage lending, retail banking and consumer finance offices nationwide. The company's principal subsidiary, Great Western Bank, is a home mortgage-oriented consumer bank with banking branch networks in California and Florida.