Credit Unions Make a Splash in Student Lending

Splash Financial said Wednesday its student loan volume increased last year, and it called out two credit unions, among others, for contributing to its results.

The Cleveland, Ohio-based company provides an online platform where borrowers can get quotes to refinance their student loans from a variety of banks and credit unions.

Among its new lenders, Splash named Bethpage Federal Credit Union of Bethpage, N.Y., on Long Island ($11.5 billion in assets, 432,699 members). NCUA data showed Bethpage held $9.8 million in private student loans on Dec. 31, up from $540,703 a year earlier. Its student loans still only account for 0.1% of total loans.

“Growth in today’s market is very competitive. Bethpage is excited to partner with Splash to accelerate our new member and loan acquisition, through a best-in-class and frictionless, digital student loan refinance experience,” John Witterschein, vice president, consumer credit at Bethpage, shared.

Splash also singled out First Tech Federal Credit Union of San Jose, Calif. ($14.7 billion in assets, 652,828 members), as an existing member that is continuing to invest in the platform.

First Tech’s private student loans rocketed from $11.2 million and 0.1% of total loans in December 2020 to $727.4 million and 7.5% of total loans at the end of December 2021.

“We strive to provide our members with personalized financial services and flexible loan refinancing options for a variety of situations,” First Tech CFO Marito Domingo said. “Over the past couple of years, Splash has evolved to become one of our most trusted fintech partners — actively working with our team to support our goals and drive growth.”

Among all credit unions, private student loans accounted for $6.5 billion, or 0.5%, of their total $1.24 trillion portfolio as of Sept. 30. Student loan balances grew 8.3% over the previous 12 months, while total loans grew 6.2%.

A news release from Splash said it is drawing lenders looking to increase their visibility among the millennial and Gen Z population.

According to Splash, student loan rates have been as high as 7.90% since 2012, depending on the education level, loan type and when the loan was obtained. By comparison, Splash said its customers received an average rate of 3.51% APR last year, including a 0.25% autopay discount.

Steven Muszynski, founder and CEO of Splash Financial, said the company is helping people affected by the student loan debt crisis.

“Student loan debt imprisons many Americans — delaying or preventing them from enjoying life’s greatest milestones, such as buying their first home or starting a family,” Muszynski said. “At Splash, we’re making the process of saving money on student loans as fast and easy as possible, in constant pursuit of our mission to make people more powerful than their debt.”