20% of Households Have Student Debt, but CUs Helping

Nearly one in five U.S. households had college debt in 2010, double the debt in 1989 and up 15% from 2007, with the biggest burdens on the young and the poor, says a new study. But credit unions are helping out in several ways.
 
Roughly 22.4 million households reported having student debt. Higher tuition costs and an increase in college enrollment as people laid off went back to school are two key factors in the jump, according to an analysis by the Pew Research Center, which noted the biggest three-year increase in student debt in more than two decades (Associated Press via The Kansas City Star Sept. 26).
 
Pew's analysis is based on the Survey of Consumer Finances, conducted by the Federal Reserve every three years. 2010 is the latest data available.
 
The biggest jumps occurred in well-off families who financed costly private colleges and in lower-income households who enrolled in community colleges, public universities and other schools to boost their resume in their quest for higher-wage jobs. The lowest-income fifth of households are experiencing the greatest stress, said Pew.
 
Enter credit unions. Credit unions cannot alleviate the full financial impact on families, but some Texas credit unions are making an impact, one student at a time, by offering scholarship programs and savings challenges, according to the Texas Credit Union League (LoneStar Leaguer Sept. 28).
 
Galveston-based, $44 million asset Coastal Community FCU, for example, offers Money Mission, an online financial literacy video game launched by the Credit Union National Association and approved for inclusion in the Jump$tart Coalition for Personal Finance Literacy Clearinghouse, said the league.
 
It uses entertaining videos to teach personal finance basics such as recognizing opportunity costs and budgeting, to high school students. The lessons are reinforced through interactive gameplay, which is the preferred learning style of teens.
 
The fact that Money Mission also offers scholarship opportunities for high school seniors is what sold Coastal Community FCU President/CEO Carol Gaylord-Purdy on the program.
 
"We've wanted to offer a scholarship program for some time," she told the league, "but we've lacked the expertise, as well as the time and resources to develop one."  With a child in college, she knew the financial burden college can place on families.
 
 "With minimal monthly cost, through Money Mission we are able to offer our members an opportunity to earn scholarship dollars, thereby providing some financial relief to families," she said. The more credit unions signing up for Money Mission, the more scholarship dollars are available, she said.
 
A+ FCU, a $955 million asset credit union in Austin, has a scholarship program and has also partnered with Austin Community College (ACC)  Student Life to offer what it says is the nation's first community college savings challenge, the Riverbat Savings Challenge, said the league.
 
The first 10 contestants have been chosen from more than 90 ACC students who applied. The contestants will compete for a $2,500 grant prize and other cash prizes.  The challenge begins this month and runs to March. To follow their progress as they work toward their goals, use the savings challenge link.