Yes, the credit union has full control over loan pricing and sets the index, margin, and credit tiers.
Yes, the credit union will fund the loan and hold the entire loan balance, establishing a genuine opportunity for long-term member relationships.
Yes. As part of the Student Choice solution we provide call center services to your members, both during the application process and loan servicing.
After the contract has been signed, your credit union can be up and running on the program within 30 to 45 days.
Student Choice, in partnership with an experienced student loan servicing organization, manages loan servicing. Credit unions will receive frequent, regularly-scheduled reporting, and also have the ability to access borrower and co-borrower loan information.
No, private student loans are not guaranteed by the federal government. These loans are underwritten, funded, and held by the credit union.
A borrower is not required to apply with a co-borrower. However, applying with a credit worthy co-borrower may improve the borrower’s chance of meeting the applicable credit union’s approval criteria and potentially qualify the loan or line of credit for a lower interest rate.
Both federal and private student loans are normally non-dischargeable in bankruptcy. According to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, federal or private education loans cannot be discharged in bankruptcy unless the borrower can prove repaying the loan would cause “undue hardship".
With any lending product or program, measures must be put into place to responsibly manage risk. Private student lending is no different. Key risk mitigation strategies include the following:
Prudent, risk-based underwriting that encourages use of a co-borrower (note that more than 95% of existing Student Choice loans have a co-borrower)
Lend only to four-year, not-for-profit colleges with a proven history of low student loan default rates
Loans must be "certified" by the college's financial aid office (in order to validate enrollment and ensure the loan amount is NOT more than the cost of attendance minus other financial aid) and then disbursed directly to the school
Emphasis on direct-to-member lending within your community
No. Student Choice manages the most difficult and time-consuming aspects of private student lending, including: origination, processing, school-certification, disbursement, and servicing.