What Gen Z really wants: Highlights from the student lending podcast

Even with recent rate cuts and the “vibecession” or negative sentiments about the economy beginning to wane, many young adults still have a tough road ahead financially. With the average cost of a private, four-year college hovering at $56,000 per year, Gen Zers pursuing higher education need affordable financing.

That’s why CU Student Choice was created – to provide the solutions these students and their families so desperately need through the local credit union they want to lean on. The average credit union member is currently 53 years old, which tends to be just about the time many are sending their kids off to college and trying to navigate the very difficult challenge of how to pay for it.

A clear financial need

Even if families have saved over the years and get some scholarship money or federal aid, it’s likely most students will still come up short. Funding this “gap” with a private student loan through their credit union is a solution that benefits the existing member, the new member ( student borrower), and the cooperative.

Introducing new, college-educated Gen Z members, who are just beginning their financial journeys, to credit unions is vital for long-term sustainable growth. These young adults will need car loans, credit cards, savings accounts, mortgages, investments and more throughout their lifetimes. In short, they will need all of the good stuff credit unions offer, and lots of it!

Credit unions have what Gen Zers want

Gen Z is probably the most tech-savvy generation ever and they want everything mobile-based and integrated. For community financial institutions, meeting constantly evolving digital expectations can be tough, but existing digital solutions can likely handle most of Gen Z users’ needs. Fortunately, the second most important thing Gen Z or Zoomers are looking for is quality service and a community focus. That’s where credit unions have a winning and persuasive story to tell.

But there’s still the challenge of how these young adults find your credit union. How do you get your message in front of them?

That’s exactly where a private student loan comes in. By helping them with their first major financial challenge, these young borrowers will get a chance to see your cooperative’s community focus and experience your digital ecosystem firsthand. As they use your tools, they’ll be able to see that they are pretty slick after all and can meet their mobile banking needs.

A lifetime of opportunity

The cross-sale opportunities for other products and services are there as well. For example, based on our recent analysis of CU Student Choice borrower data with TransUnion, we found that 81% took out an average of 2.5 car loans within 13 years. And just about half of those borrowers took out two mortgage loans on average. With median credit scores of 750 and median incomes of $100,000, it’s clear that the vast majority of these borrowers have leveraged their education to get secure, well-paying jobs. They are doing well financially and have greater resiliency in the job market because of their college degree.

At CU Student Choice, we’re continuing to build a more affordable solution to help finance the gap that remains as students and their families pay for college. If we can get more credit unions involved to help with the financing, then as an industry we can really help these Gen Zers finance their higher education responsibly – ­ at a fair interest rate they can afford to pay back.

Start planning for 2025 now

CU Student Choice makes it easy to get started in the private student lending space and now is the time to ensure student lending is included in your planning and budget conversations. With no implementation fees, our private education line of credit requires a low lift for a high return, with affordable rates set by each credit union partner. By getting started now, your program will be ready well ahead of next year’s peak lending season. Contact us to learn more about how CU Student Choice can make it simple to offer customized student lending solutions that benefit your current and future members.

Listen to the full podcast episode.