Millar said CUNA had been looking for a student lending solution to partner with for the past few years.

"There's a huge need in the market place for a product like this. We wanted to fill in the gap in the process for members with a college-age child, and it brings in members at a younger age," he added.

As part of the partnership, CUNA will provide Fynanz with feedback from credit unions on the loan product. Since student lending is a new area for credit unions, the two will also work together on training and education, white papers, seminars and panels on how to market private student loans.

Last May, Fynanz started a cooperative loan program with 12 New Jersey credit unions to pool funds and spread risk. Each credit union owns 10% of the loan and is responsible for completing a part of the due diligence. The program, which offers the Fynanz EdAccess Loan, now has 30 credit unions participating in New Jersey, Pennsylvania, New York and Minnesota. In addition to the EdAccess program, Fynanz also has four credit union clients that have developed their own custom loan programs.

Fynanz created the custudentloans.org portal for its EdAccess and custom loan program clients. The portal connects students looking for financing options with credit unions. The underwriting on the loan is rewritten annually. Fynanz determines the interest rate and creditworthiness of the loan by using what CEO Vince Passione calls the "academic credit score." Fynanz looks at the FICO score of the both the signer and co-signer, the students probability of graduation, years of study and grade-point average. Because the loan is written each year, the student has the chance of a lower rate if the academic credit score improves.

Recently, Fynanz was able to close $6.5 million in series A funding from a group of investors. Passione said that the financing will be used to build future products, implement a new call center and hire additional staff. One of those future products is a consolidation loan similar to the EdAccess loan.

Passione said a group of credit unions came together with an interest in building a loan for students who graduate and need to consolidate their debts. The fixed-rate consolidation loan, called EdSucceed, already has credit unions across the tri-state area and Minnesota interested in participating. The 15-20 year closed end loan offers a two year interest-only option and one tier pricing at 7.4-8.4%. Like the EdAccess loan, the credit unions will pool funds and spread out the risk.

"It's a good product for credit unions struggling to make multiple loans. For students, there are better products available now. It gives them the option to consolidate for more favorable terms," said Paul Gentile, president/CEO of the New Jersey Credit Union League. Gentile helped New Jersey credit unions come together to start the EdAccess loan program.

Down the road, as part of the CUNA partnership, Passione said he is working to develop a financial literacy program to accompany the student loan products. The program would be three-pronged to offer education before the student obtains a loan, while the student is in school and when he or she graduates. CUNA will provide collateral educational materials that will be incorporated into the Fynanz platform.

"There is a lot of misinformation when it comes to student lending, and Fynanz is set up to provide communication and follow up with a solid loan product," Millar said.

Looking at this peak lending season, Passione said that when it comes to student lending there is a lack of capacity but not demand. Tuition continues to increase, statewide funding is decreasing and unemployment is continuing to drive people back to school.

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