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Pa. CUs helping college students through credit crunch
HARRISBURG, Pa. (7/1/08)--Pennsylvania credit unions were noted in a recent issue of the Central Penn Business Journal for helping college students with loans despite the credit crunch. Credit unions see an opportunity in student lending because of tightening credit, Mike Wishnow, senior vice president of communications and marketing at the Pennsylvania Credit Union Association, told the Journal. The Pennsylvania Higher Education Assistant Agency (PHEAA) suspended its loan programs in February, encouraging several credit unions in the state to pitch in and help students, the newspaper said. Consumer lending is a credit union’s meat and potatoes, Wishnow said. Students can still apply through PHEAA for loans, but they are referred to a credit union or financial institution of their choice. PHEAA handles the loan paperwork, but does not actually provide the money, Jesus Cruz, Belco vice president of lending, told the newspaper. Belco has seen an increase in student lending over the past few years, and the credit union wants to get the word out to college admissions counselors that the credit union can help students with loans, he said. Pennsylvania State Employees CU (PSECU), Harrisburg, targets the student market because it hopes those individuals will use PSECU for more than just college loans--later, they may need help with buying cars or paying for their children’s needs, said Gregory A. Smith, PSECU president. In the last six years, PSECU has gained 55,000 student members, he added. Members 1st CU, Mechanicsburg, is offering a new student lending program, called Credit Union Student Choice. Members 1st partnered with eight other credit unions to offer students private lending. Students can borrow up to $75,000, with a 6% interest rate, Fred Ryerse, senior vice president of lending at Members 1st, told the Journal. The program also allows students to pay back their loans at a lower amount during the first two years, because most graduates do not make much money right away, Ryerse added. Like PSECU, Members 1st sees student borrowers as future members, Ryerse told the Journal.
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