Private loans? Credit unions? There are different types of loans? There are lenders other than the federal government? These are just a few questions about education finance students need to be more informed about, but are sadly not educated enough to know.
Students are exposed to only a few options when financing their higher education. Some only know about the federal government's student aid application, FASFA, but there are so many more options available. Educating a student about financing alternatives allows them to choose which option may be best for them. Even though a student may have a checking and/or savings account, doesn't necessarily mean that they are knowledgeable about finances and debt.
The question is this: Why aren't potential/current college students/graduates being educated about a product that could potentially affect their decision on a college, which career to pursue, or even their financial future? Why aren’t we taught the differences in lending options? A credit union with a connection to a college campus, benefit programs, and great rates will stand out as a synergy exists between students and credit unions, as both yearn for the need to be a part of a community, as well as be associated with the moral idea of doing the right thing.
Here is a recent Texas A & M graduate’s experience with student loans, and how she wishes she was more educated about private loans and the other benefits a credit union has to offer.
Being a recent college graduate, all that I have on my mind is when that six-month grace period is over, and I have to start paying back my Federal Direct unsubsidized and subsidized student loans back. Though I received numerous scholarships, I still had to have some extra help financing school. I was able to pay for my living expenses working part-time, and at one point I was even having to work two part-time jobs. Now, being a little more educated about the benefits of working with a credit union and education finance, I can't help but wonder if my payments would be lower, if I could have been able to concentrate more on my schoolwork not having to work two jobs, or if I made a mistake not exploring more options outside of Direct loans...
It's hard to really blame myself for not exploring my options, as I wasn’t really exposed or educated about anything else besides what was offered via the FASFA. Yes, I do bank with Wells Fargo, and maybe received an email or two about taking out a loan with them, but I never really associated them or their loans with being beneficial when trying to finance my higher education.
Through the Direct program, I was assigned to a loan servicer, so I didn't really get to choose or research about them beforehand. I ultimately had the mindset of “I'm really not sure what all of this document means, but I guess I’ll just worry about it later because everyone else I know takes out Federal Direct loans too,” but unfortunately there are so many more financing alternatives out there that I wish I had known more about before signing that promise to pay. Why wasn't I more exposed to private education loans? Why wasn't I exposed to the numerous benefits a credit union offers to a college student or recent graduate?
What can set a credit union apart when marketing to my generation:
1. A socially conscious lending partner that gives back to the community I live and attend school
2. Knowing I’m entering into a long term relationship with someone who wants to be with me when I buy my first car, buy my first house, set up an education account for my firstborn
3. Being not for profit and passing on low-interest rates on loans and free/low-fee checking and savings accounts (Wells Fargo charges me $5 a month, and for what?)
4. More education, communication and transparency
5. Personal finance educational resources such as how to borrow responsibly, understanding financial terms, etc.
6. Tools to help me pay down my student loan debt
Working with CURevl, I have learned about the different education finance options, the differences between banks, credit unions and alternative lenders and have a better understanding of my first financial transaction.
Gen Z needs awareness of credit unions and the benefits as a potential student, a current student, or even a recent graduate.
We want to do business with companies with shared values. We need a financial partner to help us along our life journey.