Callahan 1188589932|%e %b %Y, %H:%M %Z|agohover
a. Background of U of W credit union
i. Field of membership = U of W schools, and one other private school in Wisconsin
b. Student loans are currently 25% of total loan portfolio
c. $125M total student loans
d. Before, only offered federal loans
e. Launched alternative loan program last week
i. Had to look into adding program, because was necessary to be a preferred lender
ii. In the first 4 days, already 28 applications
f. Program details
i. Annual limit -$20,000
ii. Aggregate limit - $100,000
iii. Possibility of limiting private student loans to 5% of total loan portfolio
iv. 12 year repayment
v. 5 years of deferral
vi. No fees
vii. No insurance
viii. Majority of applications are online
ix. Servicing through greatlakes
x. “Look-Back” feature – can include expenses that occurred during the past 6 months
xi. Eligible borrowers are U of W Madison students, or students from the other small private college in their FOM
• If not a US citizens, then a co-signer is required
• U of W Madison has one of the lowest cohort default rates in the country
xii. Credit Criteria
• 620 FICO score, or no credit score at all
• Minimum of $18,000 income or co-signer with equivalent
• 45% debt to asset
a. Majority of loans have co-signer
g. Benefits of Program
i. 25 bps deduction for automatic payment
ii. After 36 months of on-time payments, co-signer is released
h. Distribution is through the school’s financial aid office
i. How did they model their program?
i. Lots of guidance from the U of W financial aid office
j. Why did they decide to do it in-house?
i. Want to build loan portfolio, attractive variable rate product, spread is good
k. Hold federal loans, and plan to hold private loans
