Credit Union Student Choice announced the release of a new tool today to help students in search of a private student loan. Students are given two options of searching for a credit union participating in Credit Union Student Choice (there are currently 80):
- Student provides city and state where they live or go to school
- Student can also select the state where they live, worship or go to school and select from a list of:
- Companies that immediate relatives or household member currently or formerly worked for
- Schools that student has attended or is currently attending
- Associations that immediate relative or household member belong to
The search tool returns three credit unions that have a national field of membership (Northwest FCU, NASA FCU and Addison Avenue FCU) as well as the credit unions in closest geographical proximity. I also found the information about how students can become members of credit unions to be helpful too. For example, at Addison Avenue Federal Credit Union, "You will be eligible to become a member of Addison Avenue FCU by joining Financial Fitness Association (http://www.financialfitnessassociation.org). The membership fee is $5." It would be great if the results came in tabular format so that a student would not have to click on each of the Student Loan Rate Info links to easily compare these offerings (look for a future SLA analysis here).
Credit Union Student Choice also disclosed in their press release the following information about their efforts to date:
- 10,000 loans have been made this summer. At $10,000 per loan this would amount to about $100 million, a drop in the overall bucket of a market that SLA estimates was $12-$13 billion last year. However, we are in peak lending (and borrowing) season now so that volume should have room to grow.
- Average interest rate on loans originated since May 2008 is under 6% with no origination fees
- This is 5% below what SLA estimates the rate of the average private loan is today.
Credit unions will discover that one key to their growth going forward will be to increase their penetration of school lender lists. I went back and revisited my analysis from yesterday on lender list penetration rates and found that only 4% of the 425 lists analyzed had at least one credit union listed. These lists are crucial as they are often the first (and only) place that students turn for information on private loans. Let's hope that they don't remain a "best kept secret" given their very competitive rates.
I would also suggest that you get a youth savings account like this one http://www.soopercu.org/teens-savings.aspx
Great post and info.
Posted by: Denver Credit Union | October 08, 2009 at 08:34 PM