CU Times Staff Reporter
FAIRBORN, OHIO -- Since implementing a private student loan program on May 5, Wright-Patt Credit Union has approved over $1 million dollars in student loans.
Wright-Patt was one of seven credit unions working with Callahan and Associates to create the private lending solution Credit Union Student Choice. While Wright-Patt has offered government student loans for the past 25 years, Vice President of Consumer Lending Linda Stephens said the credit union saw an increasing need among members to fill the gap between what government loans could offer and the rising cost of education.
"For a college student attending a public school for four years, that gap has grown to more than $30,000. For those attending a private school, the gap jumps well over $100,000. Private student loans fill that gap, and with so many lenders leaving the market, students will not only find these loans harder to come by, but they will likely be faced with higher rates and fees."
Stephens said that one of the things she liked about the Credit Union Student Choice program was that each credit union gets to set their own rates. Wright-Patt offers loans that start at 5%.
"You won't find a loan in the market right now that has a rate as low as what we offer," Stephens said.
Wright-Patt also uses the student loan program as way to package other services it offers to the younger student audience. The credit union has what it calls a three-for-three student essential package. When a student signs up for a checking account with debit card, a savings account and online banking with eStatements they get free checks, a discount on auto-loans and a one-time account fee waiver.
"We're looking to draw in new, younger members and the loan program provides us with a great opportunity," Stephens said. "We see it as a great program and we've received great feedback from our members."
She said that the first positive feedback came from employees with college age children who were the first ones to apply. Applicants have said that they like the simple process and being able to apply for loans online.
Credit Union Student Choice helped Wright-Patt design its Web site, www.wpcu.coop/studentloans, which provides members information on different ways to finance higher education as well as calculators to help members figure out the costs. The Web site also tells members where they can apply for loan approval.
"Credit Union Student Choice is a full service program we haven't had to hire any additional staff to incorporate this service," Stephens explained. Credit Union Student Choice helped them set up the program, design the loan application and provides a call center.
When researching options to provide members a private loan option, Stephens said that most of the programs offered involved third parties, but the Credit Union Student Choice program allows the credit union to keep the connection with the member.
"Parents that have college-bound students that have been members their whole lives love the program because they can keep the trust that exists between the credit union and the member," Stephens said.