May 21, 2026
Student loans have been getting a bad rap, thanks to federal loan program changes. Make sure your members know the difference – and that private student loans are still a strong option.
With upcoming changes to federal student loan programs, student debt has become a familiar headline, and recent commentary from high-profile economists has reinforced the idea that student loans are suppressing spending power across millions of American households. But there is a crucial point to note: not all student loans are created equal.
Federal student loans dominate the national conversation for understandable reasons. The federal portfolio exceeds $1.6 trillion, repayment policies have shifted repeatedly in recent years, and borrowers have faced uncertainty around forgiveness programs, repayment pauses, and changing regulations. These issues have created confusion and frustration for many borrowers, while also contributing to concerns about broader economic drag.
It’s important to remember that private student loans operate under a completely different model.
Private student lending continues to deliver
Credit unions and lending partners have long approached private education financing with a focus on affordability, member support, and long-term financial wellness.
Unlike federal lending programs, private student loans are underwritten with risk management and repayment ability in mind. Borrowers are evaluated based on creditworthiness, income, other debts, enrollment status, and often the support of a qualified co-signer. As a result, private student loan borrowers generally exhibit strong repayment behavior and lower delinquency rates compared with federal student loans.
Student lending builds lifelong relationships
Credit unions are uniquely positioned to offer fair and transparent loans and outstanding member-centric support. When a borrower turns to their local credit union for a student loan, that relationship frequently extends into long-term financial services and support, including checking accounts, auto loans and mortgages, making student loans a high-value loan product and a central pillar of many institutions’ growth strategies.
While larger student lenders are often criticized for their poor service and predatory policies, credit unions consistently demonstrate high net promoter scores that tie back to their competitive rates, personalized support, and transparent product information.
Credit unions have an opportunity to rewrite the narrative
Private student loans support member relationship growth and align with the credit union mission of empowering people’s long-term financial success.
“Private student loans perform well, and we continue to believe they are an important product to help credit unions serve people early in their financial lives,” explains Mike Stallmeyer, COO, CFO & Co-Founder of LendKey.
Mike continues, “Now is the time to ramp up financial education and help members and potential members understand the difference between confusing federal student loan program changes and responsible private student loans.”
Explore how private student lending fits into your growth strategy
LendKey partners with credit unions to offer fully digitized private student lending solutions that strengthen member relationships, attract younger borrowers, and support robust portfolio growth.
Get in touch with our team to discuss how private student loans can become a strategic part of your member acquisition and growth strategy.