MADISON, Wis.–Students who cannot completely pay for college themselves and require student loans to earn the degree are an opportunity for credit unions, according to a new study from the Filene Research Institute.
According to the study, “Student Lending: Challenges and Opportunities for Credit Unions,” while private student loans may only offer limited revenue to a credit union, it can be a longer-term revenue and growth driver.
The study notes that credit unions are using two different models when it comes to private student loans: a CUSO model, where groups of credit unions have come together to offer a standardized lending product, and individual credit unions offering unique private lending options.
A CUSO model is likely the best route for small- to medium-sized credit unions underwriting a limited number of student loans each year, the paper said. The CUSO model provides an "out of the box" platform that requires minimal customization to begin offering student lending options.