Once Manchester (Conn.) Municipal Federal Credit Union started its student loan program in 2009, CEO Lori Herrick wanted to create a series of videos showcasing the benefits. However, the $34 million asset credit union didn’t have the marketing budget to put the series together.
That changed in February. While at an Alloya Corporate Federal Credit Union Piranha Pool—where credit union representatives present ideas to a panel of credit union leaders for a chance to win $5,000—Herrick said wanted to make a webinar series and share it with credit unions across the country so that people will educate students, families, and credit unions.
The videos are intended to help individuals make better financial decisions and show credit unions how offering in-house student loans enhances their mission. The videos are available for any credit union to download and post on Facebook, Instagram, TikTok, and websites.
“We're all about collaboration,” says Herrick, a CUNA board member. “It has been just an amazing program that I feel strongly that credit unions across this country should be offering their membership.”
Herrick recalls members going to the government for student loans, then telling Manchester Municipal staff about how they were surprised with the high interest rates and large balances after deferring payments.
“They just weren't understanding what they were getting themselves into,” Herrick says. “When you defer loans, it takes approximately eight years to pay the accrued interest off before you start touching the principal. It’s frustrating to see people stuck in that type of trap.”
Knowing members wanted to come to Manchester Municipal for student loans the credit union researched it and then started the student loan program, which includes monthly payments, in 2009. The credit union had $2.3 million in student loans as of mid-August 2022. In 12 years of the program, the credit union has had one 30-day delinquency.
Herrick didn’t just want members’ student loans on the credit union’s books. She also wanted to use them as an educational tool, showing students and parents how to take a loan out, how to pay it back, and what it means for their future.
She recalls a family that couldn’t afford a $30,000 per year loan. Rather than just telling them no, Herrick told them to reach out to the school and explain that their credit union couldn’t loan them more than $10,000. The college re-looked at the applicant’s scholarship, and they are now paying $9,000 per year to attend the school.
That personal approach puts the member’s well-being as the top priority. That leads to loyalty, as the members that account for $2.3 million in student loans also have about $800,000 in other loans with the credit union.
“All they’ve known is us, so we’re their financial institution,” Herrick says. “Our membership’s demographic age group is lowering all the time. It’s twofold. We’re helping them tremendously, and they're helping us because they're making us relevant in their lives.”
Sam Dicken believes credit unions can differentiate themselves by figuring out how to address student loans. He writes that his credit union never came to mind while looking at student loans.
“I can’t know if student loans were even on my credit unions radar back then. But I really wish they had been,” writes Dicken, a content manager at iDiz. “My credit union could have hit a home run, but I can’t even say that they missed. They never even stepped up to the plate.”
Herrick has long considered it her mission to step up to the plate and help people. Now, she’s using the Student Loan Sense videos to help other credit unions do the same.
“Let's do the loans right and get members an education they can afford,” Herrick says. “I hope I can get these videos out and get credit unions to understand how important it is to help your membership.”