As we move into August, peak student lending season is in full force. The NJ Higher Education Student Assistance Authority (HESAA) reported on trends in loan volume for their private student loans. While their report was specific to their loan product and the New Jersey market, the trends seen are similar throughout the private student lending market. In the past seven years, over 75% of yearly loan volume has been approved between June and September. Each year, more students are waiting to apply for private student loans until August because they have to wait for the results of their Free Application for Federal Student Aid (FAFSA) to determine their need. Last summer, NJ HESAA did over 50% of their 2008 private student loan originations in August. Targeting this peak period in your lending strategy is incredibly important for increasing student loan volume.
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Here are 4 strategies for originating private student loans during peak season:
1. Train your staff. Applying for financial aid and federal loans can be confusing, so your staff needs to be ready to help students and parents who come in with questions. Your branch staff should refer your members to the appropriate member of the lending staff for help as well as be able to explain the basics of your loan product when asked. Your lending staff should be able to help guide your members through the FAFSA process before selling them on a private student loan.
2. Educate the community. Reach out to high schools or hold financial aid seminars for the community. Teaching families about financing college will make them smarter borrowers and will connect your name with student lending in their minds.
3. Partner with schools. Cultivate relationships with financial aid offices. Submit RFPs to get on the preferred lender lists. Many students select their lenders from these lists. Working with colleges can be difficult. For some tips, see 5 Steps to Productive Relationships with Your Local Universities.
4. Do some traditional (or not so traditional marketing). Make statement stuffers, put posters in your branches, or create radio spots. One credit union even advertised their student loan on a billboard. Get creative, and get your name out there before and while people are looking for alternative student loans.