NEW YORK – April 6, 2023 – Sparrow, a two-year-old financial technology startup that simplifies and streamlines the student loan process, announced today that Gene Pelham will join its Credit Union Advisory Board. Having been the CEO of two credit unions, Pelham brings over 40 years of industry experience to one of the fastest growing educational financing platforms in the country.
“Our partnership is a huge win for every credit union struggling to connect with Gen Z,” said Sparrow CEO and co-founder Harrison Hochman. “With Gene’s guidance, Sparrow is extending its platform to allow credit unions to gain the benefits of student loans without becoming a student lender. Most notably, our clients leverage student loans to swim 10 years upstream of the competition to ‘memberize’ Gen Z while they’re still in college and introduce the other products offered in their ecosystem.”
There are key moments in the life of a consumer where credit unions have the opportunity to build resilient member relationships. Sparrow’s cracked the student lending code and I am excited to support their mission. They’ve introduced ‘memberization’ into the student loan process where credit unions can quickly offer a robust student lending program without impacting current operations, projects, or having to offer the student loan off their books.
Gene Pelham, Former CEO of Rogue Credit Union
Effectively engaging Gen Z
In a 2018 study, Cornerstone Advisors found that of the borrowers who used their primary credit union to find a student loan, 65% opened a checking account, 57% opened a credit card, 44% opened a savings account, and 20% obtained a mortgage. Despite these facts, less than 5% of credit unions are student lenders. Those that watch from the sidelines do so for a myriad of reasons: regulatory exposure, resource constraints, project saturation, etc.
Sparrow’s turnkey platform allows credit unions to bypass these challenges while reaping the benefits of student loans. With marketplaces launched on Sparrow, credit unions ensure all borrowers that pass through are either current members or submit applications for membership.
Driving Gen Z membership while increasing revenue
Since launching with Sparrow, credit union partners have experienced immediate impact, including:
- Increased the average percentage of members who find funding for their student loan by 5.53x compared to the industry average
- Increased the non-interest income that credit unions make on student loans by 144%
- Accelerated membership of Millennials and Gen Z, with the average age of new members being 29 years old
About Sparrow
Sparrow was founded in 2020 by Hochman, Griffin Morris and Daniel Kahn. Since its founding, Sparrow has facilitated the search of over $300 million of private student loans with its credit union partners. Credit unions use Sparrow to offer their customers a white-labeled student loan marketplace. Founded by students for students, Sparrow’s mission is to make education accessible and affordable for all. Learn more at www.sparrowfi.com and follow us on LinkedIn.
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