by
Catalyst Corporate | Nov 20, 2023
As winter approaches, it’s time to gear up for the influx of students applying for Federal Student Financial Aid during December and January. Catalyst Corporate, and its partner
Sallie Mae®, can provide credit unions with a private student loan referral program to help fund the gap between financial aid and college expenses.
Offering a suite of education loans – created specifically for the needs of undergraduate and graduate students and their parents – can help your credit union retain and grow member relationships as a complement to student checking, debit cards, online banking, auto loans and your complete suite of financial products.
Understanding the Sallie Mae partnership
Your credit union acts as a referral source for Sallie Mae education loans. Sallie Mae originates, underwrites, funds and services the loans, which allows your credit union to offer student loans with no credit risk or balance sheet impact.
Credit union benefits
The Sallie Mae suite of loans expands your credit union’s product line at no cost. A plethora of high-value products is offered to attract new members and help retain existing members. An additional benefit is generating fee income on each originated loan without any upfront investment from your credit union.
Member benefits
The student loan program makes money available for students to fund their college needs. After maximizing scholarships and federal loans, your members can borrow up to 100% of school-certified expenses, like tuition, fees, books, housing, meals, travel, and even a laptop. The bonus? A borrower can choose between competitive fixed or variable interest rates.
With education loans from Sallie Mae, in partnership with Catalyst, your credit union members can choose from three in-school repayment options to pay off loans faster compared to conventional private loans: making monthly interest payments while in school, paying a fixed monthly amount while in school, or deferring payments until after they leave school. The earlier you begin making payments on your loan, the more money you’ll save over time. The in-school repayment options not only reduce the total cost of the loan, but also may help a borrower build credit.
Borrowers in this program can earn a 0.25% interest rate reduction when they enroll in and make monthly payments by auto debit. Students can qualify for a loan at any enrollment level.
Account access is also important. This referral program allows members to manage their loans online, 24/7. Sallie Mae’s dedicated customer service and technical assistance centers ensure students get answers for all their questions. Additionally, borrowers with a Sallie Mae account can access their FICO score for free, which allows them to track and fix their credit score.
Winter is just around the corner. Get ahead and ignite your partnership now with Catalyst and Sallie Mae. For more information, check out our on-demand webinar that explains how the referral program and the implementation process work.