Over the course of the past couple years, the availability of private education loans for students and families has been dwindling. Many of the incentives that once were offered to banks in the private educational loan sector can no longer be found. Private education loans used to be the “bread and butter” for a number of financial institutions but now it is likened more to stale bread that is growing mold and becoming a science project in your fridge. Based upon this, very few banks are still offering private loans for educational purposes. The banks still offering loans require the borrower to have a Fair Isaac’s/Beacon score equal to that of Warren Buffet or Bill Gates. So technically, they are still providing private educational loans but the chances of a borrower actually being qualified for the loan is very slim.
The good news is that our neighborhood Credit Unions have always been there for us in the past when traditional banks have not and the same is true when it comes to getting private educational loans. Yes, Credit Unions will require you to be a member, they will also expect you to have a decent credit history but at the end of the day your local Credit Union should be an option that you look into if you are seeking extra funding for your educational expenses.
Need more proof? The Financial Times commonly provides business school rankings for MBA programs around the world. Four of the top ten Universities that they have ranked in the world currently have a relationship with a Credit Union to help students gain access to loans for educational needs. Here are the four: University of Pennsylvania: Wharton, Harvard Business School, Stanford University Graduate School of Business, and MIT Sloan School of Management
To help jump start the Credit Union initiative and involvement with private educational loans, Credit Union Student Choice (CUSC)was founded in 2008 with one simple mission in mind. They want to match Credit Unions up with students and families so that they can have the option of financing higher education without a higher price tag. CUSC is partnered up with over 100 Credit Unions nationwide, so I recommend that you visit their site to see if a Credit Union near you is providing low cost educational loans. Even if your local Credit Union is not a part of CUSC, you should still check with them to maximize your options when it comes to paying for tuition at your College or University.
Unfortunately, private educational loans are more commonly used than not when it comes to covering expenses associated with higher education. The important thing is that you compare your options (Banks and Credit Unions alike) and that you get the best loan with the best interest rates and repayment terms available. As long as you do your homework in researching your options, you will be much better off when it comes time to start paying back your loans.