PenFed and Navy Federal Credit Union of Vienna, Va. ($90.6 billion in assets, 7.5 million members) have been the major forces behind an expansion in private student lending in the credit union movement.

Private student loans at credit unions have more than doubled since 2012, reaching nearly $4.4 billion as of Dec. 31.

PenFed ended 2017 with $110.5 million in private student loans, up from $24.6 million a year earlier. It moved from being the 11th biggest credit union lender to students in 2016, to ranking No. 4 last year.

Navy Federal, which started offering student loans in 2015, ended 2017 ranked No. 1 with $345.3 million on its books.

Among all U.S. lenders, student loans represented 53% of all non-revolving loans, including $1.1 trillion in federal student loans. Total student loans, including private loans, were $1.5 trillion in December, up 5.9% from a year earlier, according to the Federal Reserve's Consumer Credit Report.

Steven I. Muszynski, Splash Financial's founder and CEO, said Wednesday that about $600 billion of that debt is held by graduate students, and their lifetime default rate is under 1%.

“It's a very good investment for banks and credit unions,” Muszynski said.

Splash, founded in 2013, now has 10 employees and works with PenFed and three banks. The financial partners are the lenders and Splash provides the online channel for graduate students to apply for loans to consolidate and refinance their student loan debt.

Until the agreement with PenFed, Splash had been primarily a lender to students graduating from medical school with debts approaching $200,000. As residents they might make as little as $52,000, and be working in New York, San Francisco or another big city with high living costs.

The Splash loans are designed to allow residents to pay as little as $1 a month. Rates can range from as little as 3.5% on a five-year, fixed rate loan to a borrower with a good risk profile to 7.28% on a 15-year loan to a borrower with higher risks.