NEW YORK (2/6/13)--College tuition has been increasing more than the rate of inflation, but credit unions' private student loans can help, the Credit Union National Association's Mike Schenk told Fox Business Monday.
Economic instability and stagnate wages have made it difficult for families to save for college, said Schenk, CUNA's vice president of economics and statistics, in the item entitled "Saving for College: Three Trends to Know." Sixty percent of the U.S. population live paycheck to paycheck, he said.
The article outlines three approaches for preparing for college : financial aid including grants, scholarships and government loans; private student loans; and saving accounts, including 529 college savings plans.
Parents and students can turn to the private sector for an unsecured loan, said the article, which noted credit unions are getting into the private student loan market.
"It's not like you can get all your money through the government," Schenk told the publication. "The amount of money is not unlimited, so we offer an alternative."
Credit unions take a little different approach when it comes to student lending, said Schenk. They tend to require students to make a monthly payment, which can be as low as $25 while the student is in college, he said.
"It gives the student some skin in the game and gets them familiar with the process and helps them understand 'Yes, this needs to be paid back,'" Schenk said. While the interest rate on these unsecured loans varies in each credit union, Schenk pointed out that credit unions have typically been able to offer lower rates than banks.