Legislation from Sens. Tim Scott (R-S.C.) and Catherine Cortez Masto (D-Nev.) extending the loan maturity limit for federal credit unions would help more credit unions enter the student lending sector, CUNA wrote to the Senate Banking, Housing and Urban Affairs Committee Monday.
“Total student loan debt in the United States has reached $1.7 trillion and is now the second largest factor of household, with the average graduate saddled with over $37,000. Yet, a recent study found that hiring for entry-level college graduate positions has fallen 45%, the letter reads. “While most student loans originate with the government, more and more credit unions are finding ways to support student borrowers through private loans.
“However, one barrier for many federal credit unions from entering the student lending sector is the 15-year loan maturity limit,” it adds.
The Expanding Access to Lending Options Act from Scott and Cortez Masto would increase the federal credit union loan maturity limit by five years.
“Except for mortgage lending, federally chartered credit unions are prohibited by statute from making loans with maturity limits in excess of 15 years. As for state-chartered credit unions, only Oklahoma has a similar restriction and no such constraint exists for banks,” the letter reads. “The ability to set a longer loan maturity for federal credit union loans would provide more opportunities for education that is more affordable.”