NEW YORK (5/14/13)--U.S. credit unions are helping consumers who are struggling with the high costs of college education by offering more private student loans, according to an article in The Wall Street Journal Friday, for which the Credit Union National Association provided information.
"Nearly 590 of the nation's 6,955 credit unions--member-owned nonprofit financial institutions--offered student loans as of December, according to the Credit Union National Association, a trade group, up more than 50% since March 2011," the article said.
"Though credit unions account for just a tiny slice of the student loan market, the amount they hold nearly doubled to more than $2 billion in the same period," the Journal added.
2nd Order Solutions, a credit-risk advisory firm, said credit unions control 8% of the roughly $8 billion annual market in private student-loan originations--of which the federal government originates 90%, the article indicated.
For borrowers, credit unions' student loans tend to be among the least expensive options, Mark Kantrowitz, publisher of Edvisors.com, which operates financial aid and college planning websites, told the Journal.
The article mentions that consumers can find a credit union to join by using the aSmarterChoice.org website, a joint project of CUNA and the American Association of Credit Union Leagues aimed at helping create consumer awareness of credit unions and building membership.
The Journal also noted that the University of Wisconsin CU in Madison, Wis., will start allowing borrowers to consolidate private student loans this month. Four credit unions were featured in the article.
To read it, use the link.
CUNA's first annual High School Student Borrowing Survey, released last month, found that nearly half of high school seniors don't know how much they will need for college costs. That lack of knowledge translates to a greater student-debt burden after college. CUNA is lobbying the federal government to allow student loans of a longer duration than the current 15-year standard because today's loans are for larger amounts.
Raising awareness about credit unions is one of the steps in CUNA's, state leagues' and credit unions' Unite for Good campaign to achieve the vision of Americans choosing credit unions as their best financial institution. As that awareness grows, potential members will turn to aSmarterChoice and Unite for Good websites to locate credit unions they can join and find out more.