Why Private Student Lending?
Faced with skyrocketing education costs, students and families have become increasingly reliant on private student loans to fill educational funding gaps - the difference between the cost of attendance and the amount covered by savings and lower-cost sources, such as scholarships, grants and Federal Stafford Loans.
The growth of private student loans exploded in the 2000s, fueled not only by rising costs, but also by free-flowing capital from the secondary market. All too often, borrower value took a backseat to investor demands. While many lenders exited the market when the secondary market collapsed in the 2008 mortgage meltdown, borrower demand has remained strong due to a challenged economy and ever-increasing college costs. Nearly $8 billion of private student loans were funded in 2011 alone.
In spite of the costs, a college degree has never been more valuable to the long-term success of young adults. As student and parents make difficult decisions on how to best pay for a college education, credit unions can play an incredibly important role by providing straight-forward financial advice and fair-value financing options.
Private student lending gives credit unions a unique opportunity to:
Grow and diversify your loan portfolio with a variable rate loan product
Build life-long relationships with young adults (and families), many of whom may be new credit union members
Efficiently enter the market with no additional staff by partnering with Student Choice
Achieve optimum portfolio performance by employing sensible risk mitigation policies
Meet your members needs by offering a superior product
Learn more about our solution or contact us to discuss the program in more detail.