WASHINGTON–Georgetown University Alumni and Student FCU said it has partnered with Georgetown University to create the Georgetown University Credit Builder Program, which will provide the credit union with $35,000 annually to open share-secured Credit Builder loans and full-service checking and savings accounts for all incoming students in the 2020-21 school year, and beyond.
GUASFCU said the program, which applies to approximately 1,700 new students, is the first known instance of a university subsidizing the banking and credit building process for its students in the country. The partnership will allow GUASFCU to provide a Credit Builder loan, a $10 savings account deposit, and a custom debit card to every incoming student completely free of cost, the CU said.
According to the credit union and the university, the end goal of the program is for every Georgetown University undergraduate to complete their course of study with not only a degree, but also, a 685+ FICO score.
“The newly minted Credit Builder Program not only promises to increase the profitability of our business, but more importantly, ensures the financial wellbeing of our student body for years to come,” said CEO Sam Lazarus in a statement to the Credit Union’s external advisory committee. “This newfound partnership gives each and every Georgetown undergraduate, regardless of prior socioeconomic standing, the chance to graduate with a robust credit history and financial foundation, free of cost. No other university in the country offers a credit score along with a bachelor’s degree, and suffice to say, Georgetown is now at the cutting edge of holistic financial aid.”
Investment in Students
Added Georgetown’s University CFO David Green, “The university is thrilled to make an investment in helping our students establish or enhance a key component of their financial foundation, which should benefit them for the rest of their lives.”
In a statement, Georgetown University COO Geoffrey Chatas observed, “For many students, this is their first experience away from home and possibly their first experience exercising financial independence. Part of being financially responsible is building credit to borrow funds when needed. To that end, the university is proud to partner with GUASFCU to help our students develop their financial independence.”
GUASFCU said its internal modeling suggests that the university’s return on investment, measured by loan-interest-expense cost savings for recent graduates, could be as high as 3,500%, depending upon future interest rate fluctuations.
Plans to Expand
The credit union said if the program reaches both maximum adoption and projected cost savings, Georgetown University has agreed in principle to expand eligibility beyond incoming students to encompass every current undergraduate, of which there are over 6,500.
The new program is set to roll out August 15 in advance of incoming students arriving later in the month.
The $17-million GUASFCU has more than 4,000 members.