Recs

1

JPMorgan Exiting Student Loan Business

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

In an email to colleges across the nation provided to the Motley Fool, JPMorgan Chase  (NYSE: JPM  ) announced they would no longer be accepting student loan applications after October 12 of this year.

In 2012, the Huffington Post reported that JPMorgan would no longer extend student loans to customers who were not already existing customers of their consumer bank. The move announced today will end JPMorgan's parlay into the industry, as they hope better utilize their capital into other, more profitable, businesses such as auto lending.

These changes follow the 2009 Student Aid and Fiscal Responsibility Act (SAFRA), which removed the Federal government guarantee on student loans that were privately issued by banks. This has dramatically affected the dynamics of the student loan industry.

JPMorgan has seen its balance sheet on student loans decline from over $14 billion in the first quarter of 2011, to $11 billion last quarter, representing a decline of almost 25%. In addition, other lenders, like Bank of America and Sallie Mae, have seen their balances decline by 33% and 23%, respectively.

There was no discussion as to whether or not JPMorgan would maintain its portfolio of student loans, or explore selling it, as Citi did when they sold their portfolio to Discover and Sallie Mae in 2010.

The largest holder of student loans, the Federal Government, has seen its holdings of Direct Loans to students increase by over 500% since 2007, from $107 billion in 2007, to $553 billion in the most recent quarter.


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2624813, ~/Articles/ArticleHandler.aspx, 7/1/2015 11:21:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Patrick Morris
TMFMorris

After a few stints in banking and corporate finance, Patrick joined the Motley Fool as a writer covering the financial sector. He's scaled back his everyday writing a bit, but he's always happy to opine on the latest headline news surrounding Berkshire Hathaway, Warren Buffett and all things personal finance.

Today's Market

updated Moments ago Sponsored by:
DOW 17,732.92 113.41 0.64%
S&P 500 2,076.81 13.70 0.66%
NASD 5,019.48 32.62 0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

7/1/2015 11:04 AM
JPM $68.07 Up +0.75 +1.11%
JPMorgan Chase & C… CAPS Rating: ****

Advertisement