In the first quarter of 2025, Americans have been inundated with news that could have major impacts on the world of student lending. From a proposed pause on all federal funding to dissolving the U.S. Department of Education, uncertainty around paying for college and repaying student loans may be more stress-inducing than ever.
The good news is that credit unions are still here to help. In good times, bad times, and just plain confusing times, members turn to their credit unions for trustworthy advice and the products they need to achieve their financial goals. Responsible options for private student lending may become more in demand than ever, and hundreds of credit unions across the country are continuing to provide solutions.
Entering the private student lending space
Private student loans are NOT impacted by any federal funding headlines. As we prepare for this year’s peak student lending season, which begins in late spring/early summer, now is the time to ensure your credit union is ready to serve member needs.
Student lending is a niche product, so your institution will want to partner with an organization that already has the necessary expertise in these specialty loans.
Here are a few of the top questions to consider as your institution seeks the right partner:
Does the partner align with your credit union’s strategic goals?
Whether your credit union wants to hold student loans on its books or support members’ higher education funding needs on a referral basis, choosing the right partner and maintaining your member relationships are important. For example, an online credit union marketplace can refer your members to leading credit unions for their student loan needs, while keeping your credit union as their primary financial institution and generating income for your cooperative.
What type of support does the partner offer?
Ideally you won’t need to hire additional staff to handle student lending. With a competent partner, you’ll find all the expertise you need built right into your program. Audit support, member education, marketing materials, and more are all available to your credit union at no additional charge.
Has this partner built a successful track record within the industry?
Your evaluation process should include the history of the potential partner. Do they have a strong track record of helping credit unions build high-performing loan portfolios? How long have they been serving credit unions specifically? What kind of statistics can they share regarding the benefits both your cooperative and members can expect to receive?
Are there any potential conflicts of interest?
Some companies may offer competing lending or even banking solutions alongside student loans. Research the partner’s consumer-facing website to see what else they are offering. Are there products being advertised that compete with your own such as checking accounts, credit cards, or other loans? Organizations founded solely to assist credit unions, do not offer their own competing products. Rather, they seek to strengthen existing relationships between credit unions and their members.
The bottom line: Student Choice and our credit union lenders will continue to provide responsible student lending solutions to help families pay for college. Student Choice was founded in 2008 by several of the nation’s leading credit unions and CUSOs and has helped more than 116,000 families with fair-value private student loans. Through analyzing our historical borrower data, we can provide credit unions with specifics on aggregate member savings, profitability, and new member relationship potential to aid in decision making. Our private education line of credit requires a low lift for a high return, and our refinance solution allows members to simplify their student loan repayment. Contact us to learn more about how Student Choice can help you offer customized student lending solutions that benefit your current and future members before peak season hits this spring!
