The Credit Union National Association recently released a poll revealing that a large portion of high school seniors do not know the costs related with college or how to go about borrowing for it.
The nationwide High School Student Borrowing Survey found that nearly half of the 847 students polled admitted they did not know how much is required to finance their higher education. According to CUNA, the poll showed that more than 75 percent of students did not know what kind of interest rates are incurred in student loans nor do they know the duration of those loans.
The possibility of long-term loans and unaccommodating interest rates are not a factor that will hinder the student’s future aspirations. Almost 70 percent of high school seniors believe they will find a high-paying job after graduation.
CUNA also reported that of the students who knew they would incur debt after college, most reported the loan debt to be between $10,000 to more than $50,000.
Student lending is a growing portion of the overall portfolio that provides benefits opportunities for credit unions and students alike. Credit unions are keeping a watchful eye on the student market. The more involved credit unions become with the young community, the better they can help them achieve their career goals.
Credit unions offer better, more convenient terms and have higher payment records than other financial institutions. According to the trade group, default rates for private student loans reach less than six percent, federal student loans go beyond 12 percent, and credit union rates stay at around 1.6 percent.
There is still the issue of financial independence for the younger generation. As the poll demonstrated, most students lack basic financial knowledge and awareness of managing expenses. CUNA is currently supporting efforts to extend loan duration. Their goal is to convince government to prolong the 15-year loan standard so students are not faced with high payments immediately after graduation. Credit unions are working to educate students about financial responsibility while offering safe and reasonable loan options for their future.
Managing your finances can be difficult if you’re a new college student just trying to get by. Become a student member of Valley Federal Credit Union where you can take advantage of student loans and financial advice. Contact VFCU in Harlingen and Brownsville at 956-546-3108 for more information.