Education lending giant Sallie Mae will acquire Upromise, a company that offers college savings plans. The value of the deal was not disclosed.

Upromise is perhaps best known for its college rewards programs, which allows its seven million participants to contribute to college savings plans when they make purchases at any of 450 selected retailers. Five-year old Upromise, which is based in Needham, Mass., also administers the 529 tax-advantaged college savings programs for Arkansas, Colorado, Iowa, Missouri, Nevada, New York, California and North Carolina.  Together, these programs represent more than a million accounts and $10 billion under management.

"Joining with Sallie Mae allows us to offer families a range of new services and advice that will help them realize the dream of college," said Tom Anderson, CEO of Upromise.

Reston, Va.-based Sallie Mae, the official name of which is SLM Corp.,  plans to keep all 250 Upromise employees, its Needham offices, and its brand name.

Sallie Mae, established by federal charter in 1972, manages $127 billion in student loans. In 2004, Sallie Mae severed its government ties. 

"Sallie Mae's work with 6,000 colleges and universities, as well as America's leading scholarship organizations, creates partnership opportunities that Upromise could never achieve on its own," Anderson said in a release.

The acquisition, pending regulatory approval, will take effect immediately, although it will not affect Sallie Mae per share earnings until after 2007.

"This complements our mission to improve access to higher education and out leadership position in providing financing solutions to families and students," said Tim Fitzpatrick, chief executive of Sallie Mae.

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