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Higher ed morphs.

The credit union story from the industry's beginning includes regular people taking a do-it-yourself approach to solve seemingly insurmountable environmental pressures and creating something new.

When people lose access to a fundamental need, they find creative ways to restore that access.

There's a perfect storm of increased need and decreased access brewing in the world of higher education.

Traditionally, credit unions who play the student lending game fall into one of two camps.

Camp one keeps the program at an arm's length. By referring borrowers to groups like Sallie Mae and collecting a bounty on each head, these credit unions bring in revenue and forego the risk. What they win in one-time revenue, they lose in long-term relationships.


Camp two sees student loans as an entree into a larger relationship. They're partnering with groups like Student Choice and Fynanz to complement student loans with offerings like financial education and consolidation loans. Te loans are on their books, so they assume the risk but also have skin in the game to keep their members financially healthy.

In order to manage risk while growing responsibly, organizations like UW Credit Union, Madison, Wis., work directly with schools to certify no more money is lent than needed and use co-signers and investigate existing debt to make sure borrowers can afford the loan. As a result, its write-offs are negligible.

But the game is changing. It's time to stretch beyond what we know. Innovations are already happening outside of the financial industry.

Do-it-yourself education projects like Josh Kaufman's Personal MBA, the Kahn Academy and Jim Bloom's Edupunk movement are helping a new wave of students to skip over the middleman of high-priced colleges and follow a self-directed path to higher learning.

Kentucky's Berea College has created an educational barter system for a time-rich, cash-poor generation by offering its 1,500 students free tuition in exchange for 10 to 15 hours of work for the school each week.

How will credit unions answer the shift? Our do-it-yourself roots might hold some of the answers.

The Crash Network is a grassroots organization of more than 100 young credit union professionals. Its activities include meetings, mentorships, online collaboration and development projects. Opinions expressed are the personal views of the author.


Read more on The Crash Network

Brent Dixon is an adviser at the Filene Research Institute. CONTACT 214-736-4505 or
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Title Annotation:CRASH NETWORK
Author:Dixon, Brent
Publication:Credit Union Times
Date:Feb 2, 2011
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