Key Decision Points

 

When evaluating a potential student lending partner, it's important to consider a variety of key factors that will impact both the credit union and your members. Review the list below to familiarize yourself with the Student Choice solution.

Loan Programs

  • Undergraduate
  • Graduate Business (for grad students enrolled in an approved Business School)
  • Private Consolidation

Loan Types

  • Innovative line-of-credit structure that allows borrowers to apply once and secure financing for their entire undergraduate or graduate career (based on annual credit review)
  • Standard closed-end loan

Credit Union Portfolio Economics

  • Credit Union funds and holds the entire loan balance
  • Establishes foundation for genuine, long-term member relationship

Loan Rates and Fees

  • Credit Union determines index, margins, and credit tiers
  • Zero origination fees are charged to the borrower

Member Experience

  • Fully co-branded website with educational tools and resources
  • Education on the financial aid process and how to reduce funding gaps by exhausting all other lower-cost options
  • Online application with instant automated decision
  • 24/7 call center services
  • Experienced student loan servicing

Member Repayment Options

  • Undergraduate and Graduate Business: flexible repayment options (including in-school deferment), based on 20- or 25-year repayment period
  • Graduated repayment option also gives borrowers more managable payments during the first two years of repayment
  • Private consolidation: 15-year repayment period

Risk Management

  • Prudent, risk-based underwriting that encourages a co-borrower
  • Lend to 4-year, not-for-profit schools with a proven history of low student loan default rates
  • School-certification of the loan to validate enrollment and certify loan amount (funds disbursed directly to school)
  • Variable interest rates that adjust quarterly (CU determines index)
  • CU has ability to access origination platform and review or override any application
  • CU has ability to access our student lending performance management system to monitor key metrics
  • Emphasis on direct-to-member lending within YOUR community
  • Longer repayment terms and graduated repayment option provides borrower with manageable monthly payments
  • 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"

Regulatory Oversight

  • Ability to accommodate any concentration limit set forth by your credit union board
  • Ability to conduct regular audits of the underwriting process and overturn decisions
  • Guidance on establishing a proper loan policy

Credit Union Costs

  • One-time set-up fee
  • Pass-through costs for loan origination, servicing and call center
  • Management fee based on funded loan amount (shared success model ensures that the management fee declines for all credit union partners as the CUSO's overall loans under management grow)

Organizational Structure and Stability

  • Credit-union-owned and directed
  • No exit strategy or pressure to maximize profit for stockholders