MADISON, Wis. — Tamara Sanner is looking forward to studying in Spain soon but the semester trip abroad may not have been possible if a student loan did not come through.
A Spanish and business administration major at the University of Wisconsin-Stevens Point, Sanner recently became the first college student in the country to obtain a loan through CUNA Mutual Group's new CompleteEd private lending program, which is being offered in partnership with approximately 40 credit unions nationwide.
Toward the end of summer, Sanner started searching online for resources to continue paying for college. She came across CompleteEd and put a call into the $427 million Great Wisconsin Credit Union, of which she has been a member for nearly seven years. The credit union encouraged her to apply for a loan through the new program.
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"CompleteEd caught my eye right away. There were a few other programs from Chase and Discover," Sanner said. "My credit union had good things to say about CompleteEd so I decided to try it."
Sanner applied online and she said from start to finish, the entire process took about a week.
"The process was easy to follow," Sanner said about the online loan application. "Everything went very smoothly, my questions were all answered and the loan was processed quickly. It was a good experience."
On July 10, a couple dozen credit unions began a beta test of CompleteEd, said Jeff Meyer, vice president of product development at CUNA Mutual. Since then, several hundred loans have been approved. Meyer said CUNA Mutual compensates credit unions that participate in CompleteEd and views the program as another source of noninterest income. The company will also provide virtually all of the marketing.
Meyer said CUNA Mutual had two motivations for launching CompleteEd: to fulfill an unmet need for credit unions and consumers dealing with the rising cost of education and providing an opportunity for CUNA Mutual to go directly to an open market. The program will be marketed in and outside of the credit union industry. Still, a 0.25% discount is available to eligible, existing members and those who sign up to join a credit union. This is not CUNA Mutual's first entry into student lending. The company has offered Student Loan Network, a federal loan program, for 15 years, Meyer said.
"We want to be very disciplined in our approach to the market. We want to take the beta test results, get credit union feedback and make any modifications," Meyer said.
For those reasons, CompleteEd is not enrolling any new credit unions at this time as CUNA Mutual works out the kinks. Plans are in place to recruit additional credit unions to participate in the program later this year. Meyer said he expects a national launch to occur sometime in 2009. The goal is to have credit unions sign up before the buying season, which typically occurs in June and runs through September or October. However, the next loan application season may run longer based on feedback from college financial aid officers who expect funds may dry up quicker, Meyer noted.
"College costs are rising roughly 4% to 6% annually, so parents and students are looking for ways to close the gap on funding higher education. The interest we're seeing in our private student lending product illustrates the need that exists among hard-working families," Meyer said.
Meanwhile, Sanner, a junior at UWSP, who plans to graduate in 2010, said she is grateful for the extra money.
"I don't know how I would have returned to school without a private student loan," she acknowledged "But I do know I can't realize my dreams without completing my education."
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