Podcasts

Reliamax’s Michael VanErdewyk: ‘We’re seeing a move towards more private student loans’

  • Michael VanErdewyk has been in insurance and financial services for most of 30 years.
  • The CEO and founder of Reliamax joins us on the podcast this week to discuss the private student loan market.
close

Email a Friend

With all the excitement around online lending, there are still some spaces that have a long growth runway. One of the most persuasive growth opportunities is private student lending. Macroeconomic and policy changes are contributing to the growth thesis but so too are the number of local lending institutions that want to move into this asset class.

Today’s guest on the podcast is Michael VanErdewyk, the founder and CEO of Reliamax, a platform serving the private student lending business for community banks and credit unions all over the U.S.

SubscribeiTunes I SoundCloud

Below are highlights of the episode, edited for clarity.

Reliamax as fintech company
Reliamax sits at the intersection of lending, insurance and technology. So, we’re half fintech, half insurtech. We have more technology folks than any other department in the company, so we are a technology company.

Getting into private student lending
First of all, I come from a family of teachers. My dad was a professor, my mom was a teacher, and my two sisters were teachers. The value of an education was always instilled in me. I graduated from Dakota State University in 1983 and shortly after that, got into the insurance business. I’ve been in insurance and financial services for most of 30 years.

Rising costs of higher education
The cost of education continues to increase and the number of kids in school isn’t declining. So, it’s a big opportunity. Really, we have to talk about the cost of education. The cost of higher education in the U.S. today costs over $400 billion a year. About 25 percent of that is free money (grants and scholarships). Another 25 percent is federal student loans. The remainder — about $200 billion a year — is really family contributions.

Only a tiny sliver of that is private student loans. How do borrowers and their families fund higher education then for their children? Many times they use ways they shouldn’t. They take from their retirement accounts, take home equity, or use credit cards. So, the gap for private student loans is big.

The focus on private student loans
We only do private student loans. With the change in the administration, we’re seeing a move towards more private student loans and less federal ones. If you look at the total outstanding student debt, there’s about $1.4 trillion in federal student loans and $100 billion in private student loans, comprising only about 7 percent of total outstanding student debt.

Reliamax’s customer base
Our clients are lenders — banks, credit unions and alternative lenders — and typically the community banks and credit unions. Most haven’t had a student loan business before and they’re looking to get into the asset class. We’re enabling them to enter the asset class, helping them to diversify away from mortgages and auto loans and attract the Millennials/Gen Z that they’re after.

Student loan competition
Some competitors entered this space after 2009 and they’re focused on consolidation/refinancing loans. They’re not focused on the in-school market. They don’t have the data like we do going back 30 years and they haven’t been through an economic downturn. About 75 percent of what Reliamax does is focused on the in-school lending market.

We aren’t really seeing lenders get into the in-school space. It’s still just a few of us competing here. Sallie Mae, Wells Fargo, Discover, PNC, and Citizens would probably be the top in-school lenders.

0 comments on “Reliamax’s Michael VanErdewyk: ‘We’re seeing a move towards more private student loans’”

Online Lenders, Podcasts

‘The conversation in most bank boardrooms now is can we digitize fast enough?’: Numerated’s Dan O’Malley

  • Numerated is a digital lending platform used by banks to issue credit to SMB customers.
  • On the back of an acquisition of Fincura, Numerated CEO Dan O'Malley joins us on the podcast to discuss the future of SMB lending.
Zachary Miller | January 20, 2022
Podcasts, Sponsored

‘What fintechs have done right is understanding who their customer is, and building for them’: BlueVine’s Herman Man

  • There are 30 millions SMBs, and they create two thirds of the jobs in the US economy – who’s building for them?
  • BlueVine’s CPO Herman Man joins us on the Tearsheet Podcast to talk about the importance of customer-product fit, and what’s next for digital-first banking solutions and the fintech ecosystem.
BlueVine | January 19, 2022
Finance Everywhere, Podcasts

‘It’s a lot more fun battling over 150 basis points than 10 basis points’: Tern’s Brion Bonkowski

  • Tern is an embedded finance platform run by Brion Bonkowski.
  • He joins us on the podcast to discuss the platform's roots in cross border debit payments and where the platform is headed in the future.
Zachary Miller | January 12, 2022
Podcasts

Behind Green Dot’s embedded finance business with Amit Parikh

  • Green Dot has its hands in a few different businesses, including an embedded finance platform.
  • The firm's Amit Parikh, who heads up the banking as a service group, joins us to talk shop.
Zachary Miller | January 05, 2022
Podcasts

‘We are going to take everything that Gusto built and make it available as a platform’: Gusto’s Tomer London

  • Beginning with payroll, Gusto has moved deeper into fintech for the 200,000 businesses it serves.
  • Co-founder and Chief Product Officer Tomer London joins us on the podcast to discuss Gusto Wallet and the company's launch of Gusto Embedded Payroll.
Zachary Miller | December 28, 2021
More Articles