WASHINGTON (8/19/08)--A new credit union service organization (CUSO) is finding success as a new entrant in the private student loan market. Credit Union Student Choice, launched in May, announced it has approved more than $25 million in private student loans for the upcoming academic year. "We could not have picked a better time to help credit unions successfully enter the private student loan market," said Jon Jeffreys, president of Credit Union Student Choice. "We've enabled credit unions to fill the void for students and families during a time of critical need, as many banks and finance companies have been forced to leave the market," Jeffreys said. "Credit unions are uniquely positioned to excel in private student loans, and we're proving that point," he said, noting that "more than 1,500 students have already been approved for a low-rate, zero-fee CU Student Choice loan with their credit union this season." Sixteen credit unions in 13 states offering the loans through the CUSO's services. With the turnkey solution, credit unions can offer their own full-service private student loan program without adding staff. Credit unions' balance-sheet lending capabilities places them in a power position to gain market share, form long-term relationships with young adults and schools, and provide a valuable financial service when other lenders are struggling with unfavorable market conditions, he said. "Most private student lenders rely on secondary market access to fund loans," Jeffreys said. "Due to the mortgage meltdown and ensuing credit crunch, that market has completely evaporated, forcing many lenders to stop funding new loans or significantly raise their fees and rates." Credit unions partnering with Student Choice are finding the loans are a significant source of Gen Y membership growth. Early results indicate that although they were eligible for membership, more than 80% of the student applicants were not currently members of the credit union. The CUSO's product features zero origination fees, lower interest rates, in-school deferred payment, co-signer release, and graduated repayment option. It is structured as a line of credit, allowing students to make multiple draws during their college years from a single application.