College Ave Management Meeting: Early Readthrough from Plus Program Changes

Research evidence excerpt

TD SECURITIES (USA) LLC

SECTOR NOTE

September 8, 2026

■ Diversified Financials: Consumer Finance

College Ave Management Meeting: Early

Readthrough from Plus Program Changes

Moshe Orenbuch

THE TD COWEN INSIGHT

Burç Okumuş

We hosted College Ave CEO Joseph DePaulo and CFO Mike Rosica for a virtual investor group

meeting. The discussion covered early readthroughs for private lenders following changes to

the federal PLUS programs, graduate loan pricing, competitive dynamics, credit. Below are

our key takeaways.

Early Readthroughs for Private Lenders following Plus Program Changes: DePaulo noted

that, before implementation, College Ave estimated that roughly $9 bn of the federal

government’s approximately $15 bn in annual Grad PLUS originations could migrate to

private lenders. However, early readthroughs suggest the transition may be slightly smaller

than initially expected during the first origination cycle. He cited two potential factors: first,

grandfathering provisions may be slowing the transition, as existing students can continue

using Grad PLUS for the remainder of their programs; second, some prospective students

may defer programs if they can't secure sufficient financing or reconsider programs with less

attractive post-graduation economic outcomes as the cost-benefit aspect becomes more

apparent. However, DePaulo and Rosica noted that demand remains strong for STEM degrees,

particularly medical and dental programs. We would also note that universities will have to

tailor programs and their cost to the new realities, which could increase volume over time.

Some universities have adopted a risk-share model, another way to attract private capital to

the education space. It appears that the privatization of the Parent Plus program is adding to

the growth in the undergrad in-school market.

Pricing of Grad Loans: DePaulo and Rosica noted that pricing remains attractive across

much of the grad market, but competition has been significantly more intense than College

Ave expected in the highest-quality professional programs, particularly medical and dental.

Borrower rates in these segments have fallen to roughly 6.5%-7.0% vs an all-in federal

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