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Michigan Credit Union League

A New Year ... and a New Look at Private Student Lending

As the calendar flips to a new year, credit unions across the nation will soon be rolling out a bevy of new products and well-intentioned initiatives, many of which will be aimed at loan growth and young adult member development — two pressing needs for almost all credit unions. One product that directly addresses both needs is private student lending through CU Student Choice. This type of lending has grown significantly in the credit union space during the past several years (growing from $1.5 billion in Q4 2011 to $3.1 billion in Q4 2013). Why should your credit union consider private student lending?

The Five Whys
Why #1: Proven way to bring in new Gen Y members.
Private student lending is a perfect program for addressing a real need for many young adults that will help you bring new young members to the cooperative.
Why #2: Strong performing asset on your books.
Don’t give away a profitable relationship by referring business to another lender. Currently, Student Choice loans have an average ROA in excess of three percent.
Why #3: Members need help.
Families need options to help with college financing. Big banks are charging much higher rates than the average credit union and even tack on additional fees while aggressively trying to win their credit card, auto loan or checking account business.
Why #4: After graduation, even those with good jobs need help.
Refinancing student loans due to high costs and high rates is a real need of many recent grads. Don’t stop working with students after they graduate. Consider offering consolidation loans and graduate loan solutions to continue building those valuable young adult relationships.
Why #5: This is what credit unions do.
Credit unions exist to help members. To continue that mission, credit unions must build sustainable relationships with the next generation. Helping students now can open the door to deeper lifelong relationships.

So What’s the Next Play?
For more information on CU Student Choice or to sign up for a free webinar, contact your league representative or Alan Babcock, lending and insurance consultant for CU Solutions Group, at Alan.Babcock@CUSolutionsGroup.com. More information can also be found on the CU Solutions Group website.

Whether it’s undergraduate, graduate business, or private consolidation, Student Choice can help you unlock the door to Gen Y members.

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2015-01-26 00:00:00