How Credit Unions Can Ease The Back-To-School Burden

From financial education to grants for the classroom and more, three credit unions share their tips for making the transition back to school a bit easier.

Summer may only be at its midway point, but that’s not stopping credit unions from back-to-school planning.

Many institutions all over the country kick off their back-to-school campaigns well ahead of the new academic year. Parents and students often need help to buy new backpacks, clothing, laptops and a host of other classroom supplies. Many educators also face an interruption in their normal income stream during the summer and may need bridge loans to tide them over until they receive their first paycheck of the new school year.

Representatives from three credit unions offered insights into their own experiences with innovative products and services that help students and teachers gear up for each academic year, from boosting financial literacy to technology loans, grants for the classroom, and more.

Loans for Teachers

In America’s heartland, Credit Union of America ($1.3B, Wichita, KS) stays true to its mission to serve its members in educational professions through its Guaranteed Teacher Loan (GTL) program. The credit union was founded in 1935 by a small group of teachers who wanted to help a financially struggling teacher from a Wichita high school.

Until the late 1990s, teachers often found other summer employment to get through the period when they weren’t receiving paychecks. Credit Union of America started its GTL program in the early 1990s as a way to help bridge the teacher wage shortfall during the summer months.

Fittingly, the credit union’s first branch was located in a closet in Wichita East High School.

Today, CUA offers GTL $2,000 loans at 6.99% for a two-year term. All eligible teachers applying for the loan must provide their teaching credentials and show no undischarged bankruptcies to qualify. Over its 27-year history, the GTL program has experienced low delinquency rates and no charge offs.

The credit union promotes an additional program for teachers called Teach, Grow, Inspire the Future, or TGIF, which provides $500 grants for the classroom. The funds can be put toward basic classroom supplies or toward more complex items such as equipment for innovative classroom projects, including robotics, STEM activities, sustainable vegetable gardens, and cameras to supplement outdoor teaching.

These are all good programs to better prepare students for higher education and future careers, explains Glenda Burkett, the credit union’s communications and corporate giving director. We want to help teachers keep their students engaged in the classroom.

We want to help teachers keep their students engaged in the classroom.

Glenda Burkett, communications corporate giving director, Credit Union of America

CUA awards $40,000 in TGIF grants every year. Burkett says the credit union holds two grant application periods per year. Applications are reviewed blindly by a small group of staff and volunteers. CUA’s total giving in 2021 amounted to $450,000, with nearly $200,000 in educational gifts for scholarships and other fundraisers that support the Wichita communities.

CUA also recently launched an internship program through its Diversity, Equity, and Inclusion (DEI) committee. The short-term plan is to take on six student interns, providing each student with a $2,500 annual scholarship for four years.

We’re investing $60,000 in the future of our students. That investment will only continue to grow in the future, says Burkett.

Glenda Burkett, Communications and Corporate Giving Director, Credit Union of America

Laptop and Technology Loans

UMassFive College Federal Credit Union ($629.3M, Hadley, MA) has offered computer and technology (CT) loans every back-to-school season since 2003. The credit union serves the students through a consortium that includesfour private colleges (Amherst, Hampshire, Mount Holyoke and Smith) and the University of MassachusettsAmherst (UMass). CT loans provide students with a personal loan aimed at helping them purchase computers and other essential technology gear. The loans are for $3,000 and priced at prime rate +1% over a two-year term.

Many CT loans originate from relationships the credit union built with two college bookstores, which promote the credit union’s technology-financing options through word-of-mouth advertising in their stores. In some instances, the Smith College bookstore offers special discount pricing on Apple products, which the credit union promotes through emails to Smith College student members. At UMass Amherst, the credit union operates a full-service branch just steps away from the bookstore.

One credit union staffer performs outreach at all five colleges, cultivating relationships at campus bookstores and forging other collaborative efforts with the schools and their students.

Additionally, UMassFive has SEG relationships with over 40 community-based organizations whose employees are eligible to join the credit union and obtain CT loans at rates just slightly higher than those available to college students, with borrowing amounts of up to $15,000 over four years.

Craig Boivin, VP of marketing at UMassFive, notes, We’ve seen that people are not leveraging the maximum loan amount for these loans. Rather, they’re using these products to primarily finance a computer or smartphone purchase with a loan in the $2,000 range.

Craig Boivin, VP of marketing at UMassFive College Federal Credit Union

Prior to the onset of the pandemic, which forced many schools to restrict access to campus classes and resources, UMassFive was averaging about 30 CT loans annually. The credit union views its CT program as a core service in support of its focus on education and a preferable alternative to higher-rate credit card lending.

The credit union also runs quarterly specials, such as back-to-school loans to help with the purchase of clothing, books and other school supplies.

Financial Wellness

VyStar Credit Union ($12.4B, Jacksonville, FL) partnered with Santa Fe College in late 2021 to open a Financial Wellness Center on the college’s Gainesville, FL, campus. Students can meet with a financial wellness coach/consultant for confidential discussions about their finances. The objective is to help students develop good financial habits, including planning, budgeting, saving, avoiding or managing debt, improving credit scores, learning or improving negotiation skills, understanding major purchases, investing and retirement. As students prepare to receive refunds from financial aid grants, scholarships and loans, staff in the Financial Wellness Center help them plan the best way to use such funds to meet needs over time.

Santa Fe wanted an on-campus resource that students could access so they could be coached on daily financial issues, explains Gilbert A. Levy, VyStar’s senior vice president of regional community relations. VyStar offered those resources to the college through a cooperative effort between college leadership and the VyStar team.

Gil Levy, SVP Regional Community Communications, VyStar Credit Union

VyStar and Santa Fe also support an online video resource called It’s a Money Thing (IMT) Academy, an online video resource offering free financial education courses that apply to various life stages.

The two organizations plan to continue to refine the wellness center to better serve students with the services they need and facilitate an efficient and ongoing relationship with the college.

VyStar also extends its helping hand to students in 18 high schools. These interns manage the day-to-day operations in VyStar branches in the schools under the supervision of their school’s career academy instructors and in close partnership with VyStar staff. According to Michael Rathjen, the credit union’s vice president of school programs, VyStar has provided 1,500 paid year-long internships with the opportunity for students to continue their career paths with VyStar. In, fact, VyStar has hired over 60 student intern program graduates,’ said Rathjen.

July 4, 2022

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