Sparrow and CULCT unite to empower credit unions and drive explosive Gen Z and Millennial membership growth
New York, NY June 22, 2023 – Sparrow, a leading financial technology startup that powers student loan marketplaces, is pleased to announce a strategic partnership with the Credit Union League of Connecticut (CULCT) to drive membership growth among Gen Z and Millennials for Connecticut credit unions. Through this collaboration, credit unions will be able to use Sparrow’s groundbreaking solution to offer student loans without having to be the lender of record, providing a new medium to engage with young adults.
Younger financial consumers have proven themselves to be an elusive population for credit unions. While fintechs and banks pay huge amounts to recruit customers, credit unions must compete differently for Gen Z hearts and minds. Sparrow helps solve this problem with its online Gen Z memberization engine. We are thrilled to partner with Sparrow to provide credit unions the platform they deserve. This is an ingenious solution that takes no time to launch or maintain, comes with no balance sheet risk, and yields non-interest income.
Bruce Adams, President and CEO at CULCT
Explosive private student loan growth
Since 2016, annual private student loan volume has grown by over 200%. Despite the steep rise, most credit unions stay on the out of the game. Only about 5% of credit unions offer student loans. However, the credit unions that do offer student loans experience tremendous cross-selling. Of the members who use their credit union for a student loan, 65% open a checking account, 55% take out a credit card, and 44% open a savings account. Using Sparrow, credit unions experience the same cross-selling efficacy without having to balance sheet the risk.
“Credit unions that have a referral relationship with an affiliate student lender or don’t offer a student loan resource are actively forfeiting membership opportunities,” said Harrison Hochman, CEO at Sparrow. “We exist to ensure every CU can surge Gen Z membership by offering student loans without becoming a student lender. The success has surpassed the disbelief of our highest expectations.”
The Sparrow effect
Sparrow enables credit unions to launch their own white-labeled, turnkey student loan marketplace within three minutes. From launch, each marketplace connects to Sparrow’s extensive network of 20+ non-competitive student lenders. Effectively, Sparrow turns the credit union into an Expedia for student loans, without having to be a student lender. Sparrow pays the credit union non-interest income on disbursed loans. Credit unions use the Sparrow platform to configure automated marketing campaigns and cross selling members on existing products.
With over 2.8 million members, PenFed uses Sparrow to power its student loan refi at scale. Sparrow’s industry leading technology gives us an edge to succeed.
Jaren Snyder, Product Manager at Pentagon Federal Credit Union
Credit unions who have switched from traditional affiliate relationships to launching a marketplace on Sparrow have experienced:
- 144% higher payout per funded loan
- 4.5x higher funding rates per hundred pre-qualifications
- Access to 260+ unique data attributes per non-member
Sparrow was founded in 2020 by Hochman, Griffin Morris and Daniel Kahn. Since its founding, Sparrow has become one of the fastest growing educational financing platforms in the U.S., facilitating the search of over $400 million of private student loans.
About Sparrow
Sparrow, one of the fastest growing student student lending platforms in the U.S., offers solutions to borrowers and businesses. Borrowers use Sparrow to search and compare real student loan rates through a single form, bringing simplicity, choice, and transparency to an otherwise inefficient and opaque lending process. Businesses 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.
About CULCT
The Credit Union League of Connecticut serves, advocates for, and advances the interests of Connecticut credit unions in order to support their growth and maximize the positive impact credit unions have on their members, communities, employees, and on all their relationships. For more than 88 years, the Credit Union League of Connecticut has helped its members position for sustainable success and growth through a variety of offerings including government relations, regulatory compliance, executive education, vendor partnerships, and marketing services. To learn more visit www.culct.coop.
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