College Students and Low-Income Designation

Numerous studies show that lifetime earnings and level of educational attainment are positively correlated.

However, there are some college and university credit unions, which have received a low-income designation from the National Credit Union Administration (NCUA).

According to NCUA's regulations, "[t]he term “low-income members” also includes those members enrolled as students in a college, university, high school, or vocational school."

In other words, NCUA does not consider the income of the member enrolled in college or university nor the financial wherewithal of the student's family. Also, NCUA does not take into consideration that upon graduating college students will on average see a significant increase in their earnings relative to the broader population.

For example, Georgetown University Alumni & Student Federal Credit Union has a low-income designation.

But a study by Payscale.com found that Georgetown graduates had a median starting salary of $55,000 and a median mid-career salary of $110,000, according to a November 2008 article in The Hoya. The survey only considered students without graduate degrees.

If the study had included students with graduate or professional degrees, the pay would have been significantly higher.

College students have greater economic mobility. It is a misnomer to call credit union members enrolled in college low-income members.

NCUA needs to reconsider treating members that are enrolled in college or universities as de facto low-income members.