September 30, 2025
Here we are, entering the final quarter of 2025. The Fed continues to navigate inflation and high rates, regulation remains turbulent, and most loan verticals barely moved last month. But the bigger challenge for credit unions is strategic: identifying where genuine growth will come from.
At a micro-level, credit union conference season has wound down, featuring keynotes and sessions on fintech, the pace of change, and the emergence of AI.
The more things change …
But all of this is transformable. The economy is cyclical, the government—well, influenceable to some degree, at least—and partnering with the right fintech can unequivocally drive growth. Most importantly, however, the challenge goes deeper than economic forces or partnerships.
But today, the most critical threat to credit unions is not rates or regulations—it’s relevance. Growth depends on aligning with new member needs.
Credit Union Products as Old as Their Members
Take a look at the average credit union’s loan portfolio. Built on mortgages and auto-lending, it’s geared towards (or, perhaps, tied to) more mature members. Yet, as we shift our focus to future growth, products to attract Gen Z—the majority of whom are in or entering their peak borrowing years—are notably absent.
This is the real risk: current products and members are not fueling growth. Credit unions must address this head-on to remain relevant.
Yes, older consumers are concerned about their finances, but they also have a greater financial foundation while soaring tuition costs, ballooning student debt, and rapidly shrinking federal support have carved out insurmountable cracks in the system.
Under the newly enacted “One Big Beautiful Bill,” key shifts in federal student aid programs are underway:
- The Graduate PLUS program is eliminated; graduate borrowing is capped at $100,000 lifetime
- Parent PLUS borrowing will be limited to a $65,000 lifetime cap
- Several existing income-driven repayment plans (SAVE, PAYE, ICR) are being phased out, leaving only standard repayment and a new Repayment Assistance Plan (RAP)
- Economic hardship and unemployment deferment options vanish for new borrowers (post-July 2027).
These shifts will drive more families to private lenders. This is the moment for credit unions to seize a rare, compelling growth opportunity by proactively addressing changing member needs.
Bridging the Education Lending Gap
“Unfathomable” may be a bold word, but when only about 0.5% of total national student debt is held by credit unions, there’s no way but up. Recognizing this reality puts education lending at the center of opportunity.
Education lending can no longer afford to be overlooked, or even just considered a nice-to-have. This is a door to long-term sustainability, swung wide open.
Whether it means launching a Private Student Loan program from scratch, or easing the debt burden by expanding into student loan refinancing the time and the opportunity is now.
Understanding the Full Education Loan Spectrum
Credit unions straddling the fence may do so because they picture 18–22-year-olds in lecture halls. Yes, that’s the long-term member, but growth can be exponential.
Smart segmentation will allow your credit union to reach the parents footing the bill—deepening existing relationships—or professionals back in the classroom after mid-career pivots; the in-between borrowers who fall through federal cracks.
That shifts the job of marketing, too. The message isn’t “We have student loans.” It’s “Here’s how we’ll help you afford education when federal options don’t go far enough.” The position is simple, urgent, and member-centric.
The Bottom Line
Credit unions that invest in education lending as a generational growth strategy—not a sideline—will secure member loyalty for decades.
End the relevance challenge here. Contact LendKey today to start building your roadmap to sustainable, long-term growth for your credit union.