Student Loan Restart: 5 Ways You Can Help Your Members
It's here: in September, student loan repayments are set to resume after a long pause that was brought on by the ongoing COVID-19 pandemic. So much time has passed that many people have adjusted their monthly budgets to exclude student loan payments entirely. They've gotten used to not paying them and now, with things beginning again, people understandably have a lot of questions ahead of what will likely be a stressful experience.
Thankfully, your credit union can help its members. One of the factors that has always separated credit unions from big banks is the level of support that you can offer to members. Assisting your members--in ways both large and small--during a tough financial time is a great chance to do precisely that.
Helping Members Help Themselves
In this article, we'll cover:
- Overview of current student loan crisis
- The role of credit unions in providing help
- 5 Ways your credit union can help
The Student Loan Crisis
According to one recent study, Americans owe about $1.77 trillion worth of federal and private student loan debt as of 2023. The same source estimates that about 45.3 million people have federal student loans alone. On an individual level, the typical federal student loan debt stands at $37,718, with the overall average balance (including private loan debt) potentially reaching as high as $40,499.
People are stressed out about paying back their student loans for a wide range of different reasons. Some didn't get the jobs they'd dreamed of--the ones they went to school for in the first place--and are now questioning everything. They feel like they now have a degree that they just aren't sure what to do with. Others feel trapped by the sheer amount of money they must pay back. Regardless, people are anxious, to say the least.
The Role of Credit Unions in Financial Stability
As a credit union, you can help members in many ways. By helping them to navigate this time, you can again cement your reputation as an organization that offers personalized services and an attention to detail that larger financial institutions simply cannot match.
How Your Credit Union Can Help
- Educate your members
One of the most important services that you offer to your credit union members is education. Offer classes, one-on-one meetings, and content that helps your members receive the education they need to pay off their student loans.
- Show members how to save money and make money-saving goals
This could involve helping them set up a savings account or taking advantage of some of the other digital solutions you have to offer. Talk to your members about investing, including matching, traditional, and Roth 401 k accounts.
- Direct members to products and services that can help them manage their finances
Guide members to the right tools that will help them better plan for future financial needs. Consider how mobile banking, payment services, and early pay can alleviate your members’ financial burdens.
- Post digestible content on social media
Paying back student loans can be overwhelming. Being required to start paying student loans again after such a long forbearance period is going to be stressful for a lot of people. Create posts about where they can start to see how much they owe, setting up a payment plan, and when their payments are going to end. This will empower members to take charge of their financial situation.
- Connect members with a loan officer to go over options
If they're looking for financing options for a big upcoming purchase like a car, educate them on the pros and cons within the context of the monthly student loan payments that they're about to start making again. If they have a mortgage, find solutions to pay both the mortgage and their student loans.
Unlocking the Credit Union Experience: Explore Our Member Services Guide
At FLEX, we've recently authored a Member Services guide that helps contextualize the important role that credit unions play in members' lives. To read it for yourself, click the button below to get started. Contact FLEX today with any additional questions you may have.