CampusDoor’s Sara Parrish: Why the Resumption of Student Loan Payments Matters to Mortgage Lenders

MBA Newslink | September 6, 2023

Should the end of the pandemic-related pause on federal student loan payments matter to mortgage lenders? Sara Parrish, President of Incenter company CampusDoor, says “Absolutely yes” in an interview with MBA Newslink.

Sara Parrish is President of Incenter company CampusDoor, one of the nation’s largest third-party student and specialty loan origination platforms. The firm has processed more than $36 billion in student loan applications for over 1,600 unique loan programs. Contact her at [email protected] or 717-249-8800 or visit

MBA NewsLink: The beginning of the new school year makes the resumption of student loan repayments a timely general news topic, but where is the direct connection for mortgage lenders?

Sara Parrish: It’s another component of the “perfect storm” affecting many aspiring homebuyers and current homeowners who have student loans. These individuals benefited from a payment pause on their federal student loans during the pandemic. That period is now ending. Interest on their loans will start accruing again this month and payments will resume as early as October. The prospect of integrating these loans back into their monthly budgets, combined with the rise in mortgage interest rates to over seven percent, may deter some borrowers from buying their first home, trading up or investing in a vacation property.

When aware of this challenge, mortgage lenders have an opportunity to keep their customers’ and prospects’ homeownership plans on course and even build a new borrower pipeline. Suggesting, for example, that consumers refinance their student debt could lead to some profitable new business. Many mortgage lenders are entering the student lending/refinance market so they can not only make this recommendation, but support their customers through the process. It’s part of a larger effort to transform themselves from mortgage lenders to financial partners—with a diversified product set that keeps them “sticky” no matter how the mortgage market evolves.

MBA NewsLink: How large is the student loan/refinance market?

Sara Parrish: More than 43 million Americans owe more than $1.7 trillion in federal and private student loans, and their average federal debt load is $37,000. These borrowers span a large age bracket, from younger than 25 to 62-plus.

Among some key segments for those with federal debt: 14.7 million are 35-49, 15.1 million are 25-34, and 7.1 million are younger than 25. Those in the youngest groups are especially attractive to mortgage bankers because of their “stickiness factor”. Their degrees are also likely to boost their additional lifetime earning power.

Some of these borrowers need significant guidance. Not only are they resuming payments; many lost their original student loan servicer and must work with new financial partners. They may not know where to turn and welcome proactive outreach on issues such as refinancing.

MBA NewsLink: What if lenders have never been in the student lending business before? What should they know?

Sara Parrish

Sara Parrish: First, it can be a profitable strategy even for institutions that are not in a position to hold the loans on their balance sheets—which has been a challenge for non-bank lenders in the past. There are ways to private label refinance services where one partner handles the originations, and a second partner makes a takeout commitment. Some takeout partners are especially interested in private student loans because of their strong repayment records and borrowers’ favorable profiles (e.g., a FICO score of 750 is common).

There are also platforms that automate the student loan refi process—making it easier to get up and running more quickly.

Read the rest of the article at MBA Newslink

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