Lehman Bros. is the back-end funder through CampusDoor, its subsidiary, and the credit union will earn a percentage of the loan, not yet determined, he said. The application process is seamless to the member because the credit union's logo and the CU Student H.E.L.P. logo appear on the application. And approval can come in as little as a few minutes, he noted.

Credit unions that offer government student loans should consider adding private student loans to their portfolio because they help round out their student loan program, as well as complete their youth market, Gen Y offering, said Poulin. In addition, unlike government loans, private student loans can be prepaid without penalty.

"We were on the fence because so many other lenders have left the student lending area, like BofA, although they will stay in the federal program," said Poulin. The federal program has caps on the amount that can be borrowed, but the rates are attractive. Those caps can make it difficult, as the limits seem rather low compared to the whole expense of college tuition. The caps are $3,500 for the freshman and sophomore year, $4,000 for the junior year and $4,500 for the senior year."

"When we began speaking to credit unions about student loans, they told us that their members had been asking for a program, but they didn't have one," Poulin said. "So they started to get creative in other ways in order to lend money to parents who needed funding for sending their kids to college, like taking a second mortgage. Still, many had to turn members away. When we saw and heard that, we realized there was an opportunity there we wanted to fill."

"Our program lets CUs offer loans to students, but they won't be on the CUs' books; They'll be off-balance-sheet items. And it will help to earn the loyalty of younger members, so important to extending CU membership in that important demographic," Poulin said. "We want to help create members for life. If students know their education was helped by a credit union, we engender that kind of loyalty the right way."

Poulin said the program is a risk-based credit model with a rate on a sliding scale. Most other programs ask for a co-signer. "We don't require one, but it is encouraged. That's so the rate can be based on the combined credit rating of both the co-signer and the student borrower. The rate is based on a combination of factors including the higher of the students or the co-signer's credit score."

Students can develop a credit rating based on their history of payments on money owed. Many have developed some history through a cell phone contract they pay for or a pager he said. "And most student loan programs have a cut-off point where they release the co-signer from responsibility. Other programs are anywhere from 48 to 60 months. In our program, the cut-off is 36 months."

"We just rolled out the program to our CUs recently and introduced it at our annual meeting. We had as many as 10 CUs ask us about it later, a good sign, I think, so the interest is there. The busiest months for student loans are June through September, so I think we're breaking this at just the right time," said Poulin.

All the electronic marketing material will be provided and can be co-branded by the CU. Any printing costs (for statements stuffers and POS material) must be borne by the CU.

"This program is good for credit unions as it puts them in a position to help their members pay for the education of their children. That's something those members feel very strongly about. And it's good for the CU industry because it'll help earn the loyalty of younger members. It's putting our best foot forward in both those areas," Poulin concluded.

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