The Credit Union National Association (CUNA) has proposed that members be allowed to offer student loans with repayment terms longer than the current limit. "The 15-year standard student loan made sense in years past when the total debt taken out was much lower," said CUNA Executive Vice President Paul Gentile. "Now students are borrowing more. They need more time to pay off these loans."
Association representatives met with officials from the Consumer Financial Protection Bureau in October to argue the benefits of making the change. With a longer term, Gentile explained, loans could be structured to allow for smaller payments in the first years after graduation, when student loan borrowers struggle the most and are just starting their careers. The loan ultimately may cost more, but a default is less likely. Except for mortgages, credit unions primarily make loans with a 15-year term; but extending that time frame would allow credit unions to consolidate multiple federal student loans and make credit unions an option for more student borrowers.