NOTE:  For specific questions about each of the Student Choice loan programs, please follow the links below!

Undergraduate

Graduate Business

Private Consolidation

General FAQ for Credit Unions - Questions

Does our credit union control the pricing on these loans?

Yes, the credit union has full control over loan pricing and sets the index, margin, and credit tiers.

Does our credit union fund these loans?

Yes, the credit union will fund the loan and hold the entire loan balance, establishing a genuine opportunity for long-term member relationships.

Does Student Choice provide call center services?

Yes. As part of the Student Choice solution we provide call center services to your members, both during the application process and loan servicing.

How long does it take to get the program up and running?

After the contract has been signed, your credit union can be up and running on the program within 30 to 45 days. 

Who handles the loan servicing?

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.

Are these loans guaranteed by the government?

No, private student loans are not guaranteed by the federal government. These loans are underwritten, funded, and held by the credit union.

Do these loans require a co-borrower?

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.

Can these loans be discharged in bankruptcy?

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".

How is risk managed with this type of loan?

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

Do we need additional staff members to manage this program?

No. Student Choice manages the most difficult and time-consuming aspects of private student lending, including: origination, processing, school-certification, disbursment, and servicing.

 

NOTE:  For specific questions about each of the Student Choice loan programs, please follow the links below!

Undergraduate

Graduate Business

Private Consolidation