Match Students with the Right Loans
Oregon Community CU builds lasting relationships with student-members.
Attracting student borrowers is a difficult task, credit unions say. But they’re exploring a variety of ways to reach that important demographic.
The real challenge is to get the word out and make sure you have the marketing resources, says Ethan Nelson, director of credit administration at Oregon Community Credit Union, Eugene, Ore.
The credit union’s Chris Whittaker, director of lending services, and other credit union student loan specialists say that to reach students, they use a combination of:
- Direct mail
- Campus financial literacy classes
- On-campus presentations
- On-campus ATM messaging
- On-campus merchandising
- Participation in student publications
- Online banner ads
- Social media (Facebook, Twitter)
|The real challenge is getting the word out, says Ethan Nelson.|
Nationwide, technology-based marketing is becoming more prevalent, credit unions say. Some believe it’s the most effective marketing method, in particular for reaching younger demographics. This parallels financial institutions’ increasing use of social media, e-mail, and websites to communicate with members.
Students in dire need of loans
It’s important that credit unions do reach these younger demographics, however. Today, only 9% of credit union members are ages 18 to 24, and a disturbing 70% of nonmembers in that age group are “not at all familiar” with credit unions, according to CUNA’s 2011-2012 Survey of Potential Members.
And students are in dire need of private loans. As college tuition costs rise and federal financial aid declines, students are desperately looking for other financing options and financial management solutions.
Student loans also might be the start of a long-term relationship with student-members. The average 2009 graduate left school with $24,000 worth of debt. Because average student-loan debt is so high, it takes students a long time to pay back their student loans—and even longer still with today’s struggling economy.
Oregon Community certainly understands the importance of these relationships. That’s why it’s moving cautiously with its student lending services, says Nelson. It’s all about matching students with the right loans.
“We’re not interested in putting out a whole lot of student loans,” says Nelson. “We certainly want to grow [the program] outward from the University of Oregon, but we want to do it carefully.”
Next: A chance to expand
A chance to expand
Offering a student lending program is good for the credit union, says Whittaker, because it’s another avenue through which it can work with members.
“One of the goals of [our] credit union is to be diverse in our lending portfolio, so we’re not focused heavily in any one area,” he says.
The credit union already had established a relationship with the University of Oregon nearby. Starting a student lending program gave it the chance to serve the university’s students and their parents, and students attending other schools as well.
Oregon Community has been active in the community for years, according to Whittaker. Today, credit union staff are taking advantage of the relationships they’ve built.
The credit union offers financial awareness seminars across the community to foster relationships with members, says Whittaker. Seminars for high school students and their parents provide information about financing college. And the credit union also provides financial aid and student loan information to university students and their parents.
|"One of our goals is to be diverse in our lending portfolio," says Chris Whittaker.|
"One of our goals is to be diverse in our lending portfolio," says Chris Whittaker
“[The university has] seen value in partnering with us to be able to talk about [financial aid],” says Whittaker. He says it was a “natural progression” for the university to invite the credit union to present information to students and parents once it began offering student loans.
CUs must compete
But achieving success in a student lending program is no easy feat, emphasizes Whittaker. A credit union beginning a student loan program must offer a competitive student loan.
“There are obviously some big players that have been around for quite some time,” he notes. “So you need to be able to compete with them.”
He emphasizes the importance of transparency in student lending, especially when it comes to loan details. That’s how Oregon Community has set itself apart.
And be sure to know and understand the nuances of the student lending regulatory environment, he notes. As always, regulatory nuances can make or break your efforts.