The Chronicle of Higher Education reported today that Credit Union Student Choice has contracted with 82 credit unions across the country to offer private student loans filling the void in the private loan industry created by banks and other traditional student loan lenders exiting the market in the last two years. Typically lenders have relied on the secondary market to sell a portfolio of some of their private student loans each to raise capital to issue new loans in the following year. The credit unions' plan differs in that most intend to hold the loans for the life of the loans.
Most of these student loans are for undergraduate students only. Parents are not eligible to apply for the loans. Some credit unions may offer the loans to graduate students. Also, as these are credit based loans, borrowers may be required to have a co-signer, if they have no or poor credit. The loan rates and origination fees will be determined by the individual credit union. Note that these loans will have variable rates.
For a list of the participating credit unions and more information on the program check out http://www.studentchoice.org/loan.html.