CUs' student loan efforts recognized in Wall St. Journal

NEW YORK (8/7/09)--A Dow Jones Newswires personal finance column carried in Thursday's Wall Street Journal discusses the increase in credit unions offering student loans as a response to consumer demand in a tight-credit market.

Jilian Mincer's "Getting Personal" column notes that many private lenders are abandoning the business as access to credit tightens. However, credit unions are in a better position to make loans because they did not engage in speculative financial practices.

The column cites several credit union programs, including the Credit Union Student Choice program, which has more than 80 credit unions participating; New Jersey credit unions' new network for student loans; and Connecticut credit unions' new program in which the state partially guarantees loans made by 25 credit unions.

Paul Gentile, president/CEO of the New Jersey Credit Union League, told Mincer that banks have exited the student loan market in a big way and that the league's new network of credit unions making student loans is getting an "overwhelming" number of applications.

Tony Emerson, president/CEO of the Credit Union League of Connecticut, says the response to credit unions' program in that state has been "outstanding." He noted some credit unions are maintaining rates of 5.75% or 6% for 10 years or more. Those in the program commit to the rates for the first five years.

In the article, Mark Kantrowitz, publisher of FinAid, a website tracking the college financial aid industry, says credit unions loans are "worth considering once government loan options have been exhausted."

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