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Attracting college students to a credit union

College students are desired members for many credit unions.

The transition from high school to college is an exciting change for millions of Americans every year. In a lot of ways, the move symbolizes the transition from childhood to being an adult. There are new responsibilities to take care of, but also new friends to be made and new experiences to be had.

For credit unions, a college campus presents a different type of opportunity. While credit union executives are not concerned with rushing sororities, attending football games or cramming for exams as students, they should still see room to grow their organization. A campus gives a credit union the chance to recruit young members and help them become financially independent - a step that could lead to extended loyalty down the road.

In the fall of 2014, around 21 million students attended American colleges and universities, according to the National Center for Education Statistics. Students can be a valuable resource, and attracting a good handful of them to a credit union will have benefits for years to come. Here are some ways a credit union can make itself appealing to a college student:

Friendly policies for young people
College students, in general, do not have a lot of income. Most have to borrow money to pay for their education, with 71 percent of college graduates in 2012 carrying some sort of debt. In that year, the average student earning his or her diploma had $29,400 in loans to pay back, according to the U.S. Department of Education's National Postsecondary Student Aid Study. 

Credit unions should work to make their services more appealing to college students. A college campus is a great place to find new members for a credit union.

Because of this, students are unlikely to partner with a financial institution that will charge them exorbitant fees. A simple checking account is generally all they are looking for, along with a credit card that will not bill them through the roof if they are late on a payment. Credit unions who want to see their members spend and invest a lot may not find this the most appealing, but the ability to sign up a young member could prove beneficial.

Credit unions already do well in this area. A 2012 study found that credit unions have lower average overdraft fees than commercial banks and that nearly 99 percent of credit unions are likely to offer free student checking, according to a study by NerdWallet. Commercial banks are also more likely to have high fees for using out-of-network ATMs, another cost that turns off customers who are looking for convenient ways to access their money.

Focus on savings
To recruit a college student, a credit union must understand what that segment of the population is looking for. The best way to do this is to ensure the money that students do have can go a long ways. A member-friendly interest rate on savings accounts is a common draw. Not only will it incentivize students to pick the credit union, but a high interest rate gives members a reason to keep the money in their account instead of constantly spending.

A good credit union should reinvest its savings back into its members's pockets. One way to do this is through low interest rates on credit cards and student loans. Those policies help differentiate a credit union from much of the competition.

Mike Schenk, vice president of economics and statistics at the Credit Union National Association, said to Bankrate that credit unions are all about satisfying their members' needs, and that applies especially to college students. Banks are tightening standards for young customers, but credit unions are not at that level. 

"Credit unions, in contrast, are chartered to serve their members' needs and are more likely to not have changed their underwriting standards significantly in the marketplace," he says. "Therefore, they are making loans that other lenders do not, with really low rates and really low fees."

"A college campus gives a credit union the chance to recruit young members."

Be convenient
If a credit union is going to have any luck in recruiting college students, it first must put itself out there. Strong customer service is a necessity for any organization, especially when there is so much competition in the market. Credit unions already have a leg up because they can tailor their plans to a specific member's needs, unlike some banks that have fixed rates. But first, credit unions need to make sure students are aware of the benefits.

With many students centralized in a specific area, being convenient allows a credit union to attract a lot of eyes with minimal effort. Credit unions, on average, have almost twice as many ATMs within a mile of college campus, according to a study by NerdWallet.

At many schools, including the University of Wisconsin and UCLA, a student-friendly credit union has a branch right on campus. From a convenience standpoint, it doesn't get much better than that, as freshman on their first day of class will spot these locations as the easiest places to open up a checking account and acquire their first credit card.