MADISON, Wis. — The Filene Research Institute and the Cooperative Trust — the CU networking and professional development group for young adults in the credit union movement — have released a new white paper examining the impact of college debt on Millennials.
The paper, titled "Student Lending: Challenges and Opportunities for Credit Unions," is authored by Filene research associate Manpreet Nat and James Marshall, director of The Cooperative Trust, and addresses the fact that, according to Filene, the average borrower leaves college with $26,600 in student debt. And while federal and private programs have expanded college access for many, they have also contributed to a national college debt crisis.
"Credit unions have a prime opportunity to offer students resources that will help them better plan, financially, for college so that they aren’t burdened with debt upon graduation," a statement from Filene and the Trust said.
Some of the solutions outlined include:
- Engaging and educating high school students about all available funding options
- Customizing student lending services to fit the needs of each individual student and his or her repayment capabilities
- Incentivizing private loans with performance-based models that encourage good grades in return for reductions in interest rates
- Offering cash-flow management products to give students quick access to cash to be used toward expenses beyond just tuition.
The report offers an overview of how CUs are helping members finance college education, the opportunities CUs can provide for structured student lending, and how the current financial burden on college grads is affecting major life choices after they finish school. Additionally, the report provides examples of CUs that offer attractive loans for undergrad students and consolidation services for grad students.