WASHINGTON – Credit Union Student Choice said it is bucking a trend among student lenders with more than $25 million in private student loans approved for the upcoming academic year.
In stark contrast to the dreary news chronicling the downfall of student lenders, including such big names as Bank of America and Wachovia, Credit Union Student Choice said it is finding success as a new entrant in the private student loan market. With the start of fall semester just weeks away, the credit union service organization that launched in May said 16 credit unions in 13 different states currently are offering loans through its services. The CUSO said it provides a turnkey solution that gives credit unions the ability to offer their own full-service private student loan program without adding any additional staff. Credit unions retain the full long-term economic benefit and important relationship opportunities that these loans offer.
“We could not have picked a better time to help credit unions successfully enter the private student loan market,” said Jon Jeffreys, President of Credit Union Student Choice. “We’ve enabled credit unions to fill the void for students and families during a time of critical need, as many banks and finance companies have been forced to leave the market. Credit unions are uniquely positioned to excel in private student loans, and we’re proving that point, as more than 1,500 students have already been approved for a low-rate, zero-fee CU Student Choice loan with their credit union this season.”
According to Jeffreys, credit unions’ balance-sheet lending capabilities put them in a powerful position to gain local market share, form long-term relationships with young adults and schools, and provide a valuable financial service to their members at a time when many other lenders are struggling with unfavorable market conditions.
“Most private student lenders rely on secondary market access to fund loans,” said Jeffreys. “Due to the mortgage meltdown and ensuing credit crunch, that market has completely evaporated, forcing many lenders to stop funding new loans or significantly raise their fees and rates.”
