Lending

Responsible Approach Leads to Student Loan Success

Portfolio limits, consistent underwriting standards leads to healthy private student loan program.

February 13, 2014
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Why don’t more credit unions offer private student loans? Fear of the unknown, says Mike Long, executive vice president/chief credit officer for $1.8 billion asset UW Credit Union, Madison, Wis.

“People generally fear what they don’t understand,” says Long. “There’s been so much misinformation about student lending in general—that it will be the next bubble to hit the country because of the amount of debt students are carrying.

“I don’t think many credit unions take the time to understand that a lot of the issues out there are related to government-guaranteed student loans, not private student loans,” he continues. “If credit unions would take the time to understand what opportunity they have in this space, more would be open to offering private student loans to members.”

Another deterrent is the lack of affiliation with a university. “Again, that’s a misinterpretation because all of us have adult members with college-age kids who are trying to find a way to finance their education,” Long says. “Members are going someplace to do this—it might as well be the credit union where they do all of their other business.”

The key to student lending success, like any product, is to do it responsibly, says Long, who oversees a $90 million student loan portfolio. “We decided not to have more than 10% of our total assets tied up in this product category. For us that means we wouldn’t hold more than $190 million of these loans. So we have plenty of room to grow the portfolio.

“If you do this responsibly and underwrite these loans like any other loan at your credit union, you’ll have a good shot at success.”

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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