Lending giants U.S. Bank and JPMorgan Chase recently announced they had eliminated and reduced their private student lending programs, respectively. JPMorgan Chase will only make private student loans for existing customers.
Meanwhile, credit unions are demonstrating a strong commitment to helping students finance their education through private student loans, said New York City-based student lending vendor Fynanz, which provides credit unions with customized student lending programs and the cuStudentLoans private student loan marketplace. Fynanz, a CUNA Strategic Services alliance provider, has gained about 75 new credit union partners in the past year, bringing its total credit union partner number to more than 180.
"Private student lending has experienced significant change over the past several years," said Wes Millar, senior vice president for CUNA Strategic Services, a program jointly owned by CUNA and state credit union leagues. "Credit unions have created a strong foundation in student lending during this period and will remain steadfast in supporting students and families nationwide."
More than 125 Fynanz credit union partners participate in cuStudentLoans, a program that's managed and designed by participating credit unions using common underwriting and pricing, Fynanz said. cuStudentLoans features the cuScholar Private Student Loan and the cuGrad Private Student Loan Consolidation, and includes loan participations to enhance risk mitigation, the vendor said.
Fynanz designs customized student loan programs for its credit union partners that choose not to join the cuStudentLoans portal, which involves pooling funds with other participating credit unions.
Alice Stevens, chair for cuStudentLoans LLC and chief operating officer for the Wall, N.J.-based, $175 million First Financial FCU, said she's noticed an increased interest in student lending among credit unions. She said the cuStudentLoans program allows participating credit unions to not only serve existing members, but attract new members–the portal is designed to direct prospective, non-credit union member borrowers to the credit unions they're eligible to join.
"We're really filling a void because some students may not be able to go to school if it weren't for these loans," Stevens said. "The cuStudentLoans program also encourages students to start paying off their loans right away. Instead of deferring payments for four years…. That teaches them responsibility, and we believe it makes our portfolio perform better."
Stevens added she sees a possible shift in the private student lending business–one that moves away from large banks toward small financial institutions.
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Natasha Chilingerian
Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.
