Navigating Student Loans: A Comprehensive Review of Student Choice

Paying for college is a significant undertaking, and student loans often bridge the gap between available resources and educational expenses. With numerous options available, understanding the landscape of student loans is crucial. Student Choice aims to simplify this process by connecting borrowers with credit unions, potentially offering more favorable terms. This article provides a comprehensive review of Student Choice, exploring its features, benefits, and considerations for prospective borrowers.

Introduction to Student Choice

Student Choice is a platform designed to connect student borrowers with credit unions across the country. For nearly 20 years, Student Choice has been matching borrowers with credit unions, aiming to make paying for college easier. Recognizing that traditional private student loans frequently come with high interest rates and fees, credit unions collaborated to create a competitive student lending solution.

How Student Choice Works

Student Choice operates as a marketplace, linking students with various credit union loan opportunities. It is not a direct lender but rather a facilitator. The platform allows borrowers to search for school funding options based on zip code, school name, or type of loan. After filling out a quick form, potential loan opportunities available through participating credit unions are displayed. This centralized approach saves borrowers the time and effort of individually researching loan details from different credit unions.

Credit Union Advantages

Credit unions, as community-based non-profits, often provide more competitive rates and customer-friendly service compared to traditional banks. They typically require membership, but this membership offers numerous lifetime benefits, and just about anyone can join. Credit unions' stability stems from having a diverse loan portfolio, and student loans are often viewed as a valuable investment due to their large amounts, low bankruptcy risk, and community benefit.

Key Features and Benefits of Student Choice

Student Choice offers several features designed to benefit student loan borrowers.

Access to a Wide Network of Credit Unions

The platform provides access to a broad network of credit unions, increasing the likelihood of finding a suitable loan. As of writing, the platform works with hundreds of credit unions that offer student loan products to students across the country. According to Student Choice, the platform has successfully connected over 115,000 families with student loans.

Competitive Rates

Credit unions tend to offer more competitive rates than traditional financial institutions. By focusing exclusively on credit union opportunities, borrowers may be able to secure lower interest rates through Student Choice. Rates shown may include a 0.25% discount for optional enrollment in automatic electronic payments. Variable rates are subject to increase after consummation, and rates are subject to change without notice.

Streamlined Application Process

Student Choice offers a straightforward application process to see estimated rates. Checking your rate with CU Student Choice will not affect your credit score. The process was quick and easy. If applying with a co-applicant, you’ll want to have them present. The co-applicant will also need to provide the same type of personal information as the student borrower.

College Counseling Support

Student Choice allows borrowers to speak with a college counselor, offering one-on-one support through free counseling sessions. This can be a useful option for those with specific funding questions or who want another perspective on their financial planning.

Refinancing Opportunities

Student Choice isn’t limited to new student loans; it also helps borrowers seek out attractive refinancing opportunities. Refinancing student loans can help borrowers meet financial goals, such as locking in a lower interest rate or achieving more affordable monthly payments.

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No Application or Origination Fees

Credit Union lenders on Student Choice typically don’t charge any application, prepayment, or origination fees. There may be late payment or past-due payment fees, which can vary by lender depending on the chosen credit union.

Loan Options and Terms

Student Choice facilitates access to both private student loans and refinance loans through its network of credit unions. However, specific loan terms, rates, and eligibility requirements vary depending on the individual credit union.

Private Student Loans

Private student loans through Student Choice can be used for any items listed in your school’s cost of attendance or other education-related expenses. You may choose to make interest-only payments while in school, defer both principal and interest payments until six months after graduation, or make full payments while in school.

Refinance Loans

Refinance loans are also available through Credit Union Student Choice. Refinancing can simplify your finances because you have just one loan to pay. It also can lower your interest rate. You may be eligible to use Credit Union Student Choice to refinance federal, private, and institutional student loans. However, if you have federal student loans, think carefully before refinancing. You would give up important borrower protections, including the possibility of Public Service Loan Forgiveness, when you refinance.

Interest Rates

The better the credit rating of the borrowers or their cosigners will determine interest rates and loan amounts. Good to excellent credit will qualify for the best rates. If you can lock in a fixed-rate loan with an excellent credit score, your loan will be significantly lower than starting with a variable rate and seeing it rise to the upper percentage rates.

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Repayment Options and Terms

You may choose to make interest-only payments while in school; defer both principal and interest payments until six months after graduation; or make full payments while in school. The term of your loan can also impact the cost and monthly payment amount.

Eligibility Requirements

To be eligible for a loan through Student Choice, borrowers generally need to be enrolled at least half-time in an accredited college or university. Applicants and co-signers typically need to be US citizens or permanent residents. The maximum amount you can borrow varies. You are encouraged to apply for federal aid before applying for a private student loan.

Credit Score

The minimum FICO score required for the loan is 650; although the higher the score, the better the chances of approval and the better the rate available.

Co-Signers

CU Student Choice strongly encourages a cosigner when applying for a loan. Many of our credit union lenders offer a 0.25% interest rate reduction when the borrower signs up for automatic debit payments and is in active repayment.

Pros and Cons of Using Student Choice

Like any financial product, Student Choice has its advantages and disadvantages.

Pros

Access to Credit Unions: Provides a streamlined way to explore loan options from multiple credit unions.
Competitive Rates: Credit unions often offer lower interest rates compared to traditional banks.
No Fees: Typically, no application or origination fees are charged.
Refinancing Options: Facilitates refinancing for better rates or terms.
College Counseling: Offers access to college counselors for financial guidance.

Cons

Indirect Lending: Student Choice is not a direct lender, so the actual loan terms depend on the chosen credit union.
Membership Requirements: Borrowers need to become members of the credit union, which may involve fees and eligibility requirements.
Variable Terms: Loan terms, rates, and assistance programs vary by credit union.
Limited Information: CU Student Choice does not specify many repayment options. Credit unions in its marketplace may have certain benefits available during the loan servicing period. CU Student Choice does not explicitly offer any deferment or forbearance options. Co-signer release or co-borrower release may be possible with some partnering credit unions under certain conditions.

Alternatives to Student Choice

While Student Choice offers a valuable service, it's essential to consider alternative platforms.

Credible

Credible is a marketplace that helps borrowers compare multiple types of loan options, including private student loans. Like Student Choice, Credible doesn’t charge any origination or application fees. But the platform isn’t limited to credit unions - it includes more traditional financial institutions.

Splash

Splash is another option that is especially helpful when looking for student loan refinancing options. Through the platform, you can estimate your rates across multiple lenders.

Direct Lending Institutions

Exploring direct lending institutions, such as Sallie Mae and Discover, can also provide additional options and comparison points.

Important Considerations Before Applying

Before applying for a student loan through Student Choice or any other platform, consider the following:

Federal Aid First: Always exhaust federal loan options before considering private loans. This form opens the door to federal financial aid, which usually offers better terms, like lower interest rates and flexible repayment plans.
Credit Score: Check your credit score and work to improve it if necessary.
Cosigner: Consider applying with a cosigner to improve your chances of approval and secure better rates.
Repayment Options: Understand the repayment options and choose a plan that fits your financial situation.
Compare Offers: Shop around and compare offers from multiple lenders to find the best terms. While CU Student Choice rates are on par with other lenders, we recommend that you shop around to find the rate and payment plan that is right for you.

Customer Reviews and Complaints

Few customer reviews of CU Student Choice are available on public forums. As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB), a federal agency. As part of their mission, the CFPB allows consumers to log official complaints. Consumers have submitted 0 complaints about CU Student Choice to the CFPB. CU Student Choice has not been a party in any major legal action.

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