Generic branding

We didn't check this outfit out, but got some info on eStudentLoan.com.

This is interesting....it appears to be a brand of Goal Financial, a large FFELP consolidation outfit. In the same vein as Student Loan Network, Goal Financial, has apparently created a new brand that tries to distance itself from the existing Goal brand. But they're set up to look like a referral site that finds the best loan for you. As we understand it, you get directed primarily to Goal Financial for a loan, because, they can. We've been told that you can also get directed to Great Lakes depending on your situation. They also seem to offer private ed loans too. Didn't hear how those loans are directed though. Nonetheless, the marketing efforts of Goal Financial are testing a new channel, a new message, a new look/feel. The point is, they're testing, innovating, being creative, being different, responding to change.

But it brings up an interesting observation. It's been our opinion that there's been very little innovation in the student lending industry. Not the fault of the private companies that make it all happen -- the fault of the Department of Education....Dept of Ed doesn't know how to regulate a financial intermediary system. But the front end marketing has been very adaptive. The internet has proven to be low-cost acquisition channel. It's been the back end stuff that's stifled innoviation due to the Dept of Education: how the loans are processed, how they're serviced, how the guarnator interacts with the assets, etc.

The Department has relatively few rules/regs regarding the marketing acquistion of FFELP applications. Let's consider this: let's have the FFEL program be regulated as other credit products. Marketers have to answer to the FTC, Truth In Lending, the Fair Credit Reporting Act, and all the others. Let's take it all away from the Department of Ed. Let's let the servicing of loans be governed by the Fair Debt Reporting Act. Let's run NSLDS as a credit bureau. We'll see 30 years of pent up innovation unleashed in the marketplace. We'll have better products offered, better service, lower loss rates: that's just competition at work.

But oh my, what will the office of Federal Student Aid do? Well, they'd manage a loan level guarantee program. And that loan level guarantee would still be the market making ingredient for the FFEL program, but all the other nonsense would be regulated by real financial services regulators.