Spring has arrived, and with it comes one of the most critical windows of opportunity ahead of the summer’s peak student lending season. With financial aid award letters arriving and significant changes to federal student loans taking effect July 1 under the One Big Beautiful Bill (OBBB), credit unions must act to meet evolving borrower needs.
The good news: there’s still time to prepare. But not much.
A narrow window of opportunity
In the coming weeks, families across the country will be reviewing financial aid packages and making decisions about how to bridge the gap between aid and the total cost of education. For many, that gap is growing. As federal loan programs shift under OBBB, students, graduate borrowers, and parents may find themselves with fewer options or increased uncertainty.
This creates a pivotal moment for credit unions to step in with responsible, flexible private education financing solutions. But timing is everything. By the time summer arrives, many borrowers will have already secured their funding. Credit unions that wait too long risk missing the moment entirely.
Launching (or expanding) a student lending program
For credit unions not currently offering private student loans, now is the time to seriously consider launching a student lending program. Fortunately, building a responsible student loan offering doesn’t have to be complex or time-consuming.
Partnering with an experienced, trusted CUSO that handles everything from application processing to compliance and servicing can significantly streamline implementation. This allows credit unions to bring a program to market quickly, without the need to hire additional staff.
For those already in the space, this is an ideal time to evaluate and expand existing offerings.
Fill the gaps with strategic product additions
As borrower needs evolve, so should product suites. Under the OBBB, Grad PLUS loans will be eliminated for new borrowers, and stricter borrowing caps will be in place for Parent PLUS loans. Credit unions have a clear opportunity to step in as funding gaps grow and should consider adding:
- Graduate and professional lines of credit designed to bridge the gap between capped federal lending and the true cost of advanced degrees. With no Grad PLUS option and lower aggregate limits, these borrowers will increasingly need flexible private solutions to complete their programs. Specialized offerings for high-cost, high-earning fields such as medicine and law are becoming increasingly popular.
- Parent lines of credit to help families share the responsibility of funding education, especially as loan limits change. Parent PLUS loans—previously able to cover up to students’ full cost of attendance—will now be capped at $20,000 per year and $65,000 total per student.
A line of credit taken out in the parent’s name offers flexibility and a simpler borrowing experience over traditional loan models, allowing members to apply once and draw funds as needed.
These products not only meet immediate demand for borrowers this summer, they also deepen long-term member relationships.
The advantage of acting now
Credit unions have long been trusted financial partners in their communities. In times of change, that trust becomes even more valuable.
By acting now and launching or enhancing student lending programs, expanding product offerings, and leveraging strategic partnerships, credit unions can meet members where they are, right when they need help most.
Working with the right partner can make delivering this experience far more achievable, even on a tight timeline.
Student Choice can have your credit union’s lending program up and running in 30-45 days once the details are finalized. Contact us to learn more about offering a private student lending solution and the new products Student Choice is launching ahead of the OBBB changes this July.
