NEW YORK (4/17/12)--"For all those drowning in student debt, a credit union just might be a lifeboat," wrote personal finance writer Sheryl Nance-Nash in an article on Forbes' website (April 13).
Outstanding student loan debt now exceeds $1 trillion, Nance-Nash said, adding that many people may not realize "credit unions are surely worth a look-see."
She interviewed Alice Stevens, chief operating officer of First Financial FCU, Toms Rivers, N.J., who is also chairman of cuStudentLoans, a network of more than 130 credit unions offering a student loan with common underwriting and pricing. Its custudents.org website is powered by Fynanz, a strategic alliance provider of CUNA Strategic Services.
The author pointed out that credit unions are not-for-profit, "so that alone probably means you're going to do better than traditional banks" at refinancing private student loans at lower rates.
Stevens told Forbes that private student loans from traditional banks, especially between 2008 and 2012, left some borrowers holding interest rates of up to 14%, compared with cuStudentLoans' rates of 4.75% to 7.25%. One student with more than $100,000 in student debt at interest rates up to 14.13% refinanced and saved $8,400 a year in payments.
Nance-Nash cited another "big plus" from credit unions: a co-signer on a student loan can help get a lower rate for a student, but a credit union may allow the co-signer to leave the obligation once the student borrower has made payments for 12 consecutive months.
To view the article or to learn more about credit unions' private student loans program, use the links.