Academic Finance Corp.
Address: One West Boylston St., Suite 201, Worcester, MA 01605
Phone: 508-854-9950
Fax: 508-854-9972
Website: www.academicfinancing.com
Number of employees: 18
Top Executive: Howard McGinn, Founder and President
Product or Service: Student loan organization
Year founded: 2004
Rx for college tuition pain
The excitement and joy that students and their families experience at receiving a college acceptance letter can quickly turn into dismay and anxiety when they realize how much it’s going to cost. Annual tuition hikes from 4 to 11 percent for more than a decade have boosted the cost of many state colleges into double digits, while the yearly bill for some private universities now tops $40,000.
Adding to family stress is the financial aid process, full of acronyms like FAFSA, (Free Application for Federal Student Aid) and FFELP (Federal Family Education Loan Program). No wonder Mom and Dad are shell-shocked.
Providing relief for parents who need help financing their children’s college education is the mission of Academic Finance Corporation, notes Howard McGinn, founder and President. "Applying for college loans is highly impersonal and electronic," he says. "We can walk you through the process."
McGinn stresses the experience AFC offers to college loan customers. He was head of Fleet Bank’s student banking group and, combined with members of his staff, they have more than 200 years of experience in education financing. When Fleet merged with Bank of America, McGinn led his entire group in setting up a new company.
"We were committed to forming a non-profit dedicated to helping families finance their children’s college education," he says. "As a not for profit, we can pass along our cost savings to borrowers."
Among the variety of educational loan products that it handles, AFC offers three principal financing options that fall under FFELP: the Stafford loan for students, the PLUS loan for parents of undergraduate students, and the Grad PLUS loan for graduate/professional students. AFC offers borrowers lower interest rates than the current federal rate of 6.8 percent on Stafford loans and 8.5 percent for PLUS.
Borrowers who take advantage of AFC’s borrower benefit program, called Diamond Benefits™, can reduce these rates by up to 2 percentage points. "We give borrowers a quarter point interest rate reduction automatically when they begin repayment of the loan," McGinn explains. "If borrowers elect to have their payments deducted from their checking or savings account (Auto Debit / ACH), they are entitled to an additional 1.75 percentage point reduction in interest rates."
AFC has achieved rapid growth in the short period since it made its first loan in April 2004. By the end of its first year in business, AFC ranked 60th among 6,000 lenders listed by the U.S. Department of Education, with a loan volume of $72 million. This year, the company’s loan volume has risen to $250 million.
AFC is affiliated with the Brazos Group, the largest not for profit holder of federally guaranteed education loans in the United States, with $11 billion in assets. AFC is among the top 10 lenders in the report of the New York Higher Education Service Corporation. The company works directly with financial aid offices and is listed as a preferred lender by 300 colleges.
"This is where 90% of our loan volume comes from," McGinn explains. Recently, however, AFC has been introducing itself to the Central Mass. community with radio and TV commercials, billboards, and sponsorship of a WRTA bus.
McGinn urges parents of college bound students to call AFC as early as possible. "We can help them understand how they can finance their children’s college and even graduate education. And we can turn their anxiety into confidence."
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