By Bill Merrick
Panel schools conference attendees on benefits of private student loans.
Would your credit union welcome a chance to forge 15-year relationships with young adults and their parents with loans that, 90% of the time, have co-signers and earn a yield of 3% to 6%?
Then why do less than 0.5% of credit unions offer private student loans?
That’s what a panel of student lenders asked during the CUNA Lending Council Conference in Miami.
To be sure, private student loans have suffered a black eye in recent years as “bad actors” inundated students with marketing messages for loans up to $50,000 per year, according to “Demystifying Student Loans,” a white paper handed out during the panel discussion. “Loans were given freely and if finances dried up, bankruptcy was an easy option. Funds financed more than a few motorcycles and trips to Europe.”
But these excesses have largely been corrected, and student loans offer opportunities for both income—and to provide an affordable way for members to send their children to college, panelists said.