Credit unions are often a great fiscal option to traditional banks.

The Wall Street Journal contributor Ruth Simon offers this analysis on how these institutions are supplementing the student loan market:

Credit unions are offering more private student loans, creating new choices for borrowers grappling with high college costs.

Nearly 590 of the nation’s 6,955 credit unions offered student loans as of December, according to the Credit Union National Association, a trade group, up more than 50% since March 2011.

Student loans from credit unions can be among the least-expensive options, says Mark Kantrowitz, publisher of Edvisors.com, which runs college-planning and financial-aid sites. But “you need to do your due diligence.” Interest rates vary substantially, from around 2.75% to 9.3%.

For loans directly issued by the federal government, rates are currently fixed at 3.4% for subsidized loans, 6.8% for unsubsidized loans and 7.9% for Plus loans made to parents and graduate students.

The website ASmarterChoice.org can help you find a credit union to join, while cuStudentLoans.org and StudentChoice.org list some that offer student loans.

A major downside: Loans issued by credit unions and other private lenders generally don’t have the same protections and options as federal loans, such as income-based repayment and longer deferment and forbearance.