LOS ANGELES (AP) — JPMorgan Chase & Co. is exiting the student loan business as more families opt for government-backed loans, which are generally cheaper and have more protections.
The New York bank had already been scaling back its role in student lending. In the spring of 2012, it stopped making student loans to borrowers who weren’t already Chase customers. Chase made just $200 million in student loans last year, down from $6.9 billion in 2008.
The lender said Thursday that it won’t accept student loan applications after Oct. 12. In a memo to colleges, Chase noted it would continue to work with students, co-signers and schools to process loan applications received before that date. It also asked administrators to schedule all final loan disbursements before March 15.
“We just no longer see meaningful growth in this market and have decided to invest our resources in our other business, like auto lending, where we do see some real future potential,” said Trish Wexler, a JPMorgan Chase & Co. spokeswoman, in an interview.
The bank had 12,500 customers with Chase student loans last year, a fraction of the 56 million people that it counts as consumers.
“So this really has become a very small part of our portfolio,” Wexler said.
Wexler noted that many students have been increasingly relying on government-backed education loans, a trend that’s reduced the private market for student loans by 75 percent in the last five years. Private student loans issued by banks tend to have higher, variable interest rates than the loans issued by the U.S. Department of Education. They also do not come with the same guaranteed protections, such as deferment for unemployment or economic hardship.
Other major lenders continue to offer education loans, including Discover Financial Services, which saw its private student loans grow 5 percent from a year earlier in the April-June quarter. Sallie Mae, formally named SLM Corp., has seen an increase in demand for student loans as higher education costs continue to rise.
JPMorgan shares ended regular trading up 24 cents at $52.11.
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This Week’s Celebrity Instagrams (6/18-6/24)
25 photos Launch gallery
1. Me & the homie @jaleelwhite #RujohnFoundation Happy to be in Jamaica! Good times
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5. Good Morning. Early day in Detroit! Making press rounds for @thebossnetwork's Ladies That Lead Tour. Thank you @traycemadre and @colourbynumbr for my glam.
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6. POWER the best show on TV @djenvy, Queens we so big out here. #EFFENVODKA #FRIGO
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7. They said u lost a step, wasn't explosive as once was, the best days was in the real view, questioned your drive, your leadership, your commitment, you don't have killer instinct, going back home is the worst mistake in your career, he got the coach fired, players traded, won't work between him and Kyrie, Him and Kev won't work, love your teammates to much, there's no way he can deliver a championship in his hometown, etc etc etc.... But guess what THATS NONE OF MY BUSINESS #StriveForGreatness #ThisOneIsForTheLand #PutSomeRespeckOnMyName Hahahaha!!! Yes sir
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8. Oooooh weeee this man right here is responsible for at least three of our four babies!! #JOE ❤❤❤🎤 #rnb #king #voicelikebutter #ForPeetesSake
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9. Hanging with my @abcnetwork family! @abcunclebuck tonite y'all check us out ! @anthonyanderson @traceeellisross
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10. My broski ( @sayeedshahidi ) and I are on Top 5 Live on @go90 at 5 (which is super duper close)! Make sure to tune in :) #UncleBuck #Blackish
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11. Lights out💤 #GoodNight
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12. Late nights mornings
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13. Ran into the lovely talented @siedahgarrett on this brutiful favvuz deh!
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14. #halal #love #thedargans #kattwilliamsSHOW #mashallah when that Jennah piece HIT!! @sweetjennahcollection glasses by @baddieglamaccessories LIZ 😍 @dynamiteko top @dazzledmv and jeans @thevision414 and shoes: @louboutinworld
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15. Big Hair and Optical Illusions #OceanDrive #MiamiLiving #coverparty
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16. MAMA and THE SAVAGES ... ⚓️ #supportyourlocalgirlgang
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17. From the bottom of my ❤️, thank you new followers & old! & hello fellow night owls! #grateful #racheltrue #naturalhair #curlyhair #curlygirl #healthyhair
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18. I feel so grateful because I met these amazing young minds, visiting from Houston TX, during their college tour stop today at #usc.These students are ALL extraordinary and embody academic excellence so I'm humbled to have shared a few moments with them to applaud and celebrate their bright futures ahead! Thank you @EmergeFellows for inviting me to speak and blessing me with your love and attention this afternoon!
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19. Happy Fathers Day Pops. U taught me how to be a man. Lessons of love, hard work & gratefulness. Sorry the fishing didn't stick. LOL. I Love U!
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20. Sky Zone and Ice Cream! Best Fathers Day Ever!! Photo credit @mariahcarey
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21. Look what finally came in the mail 😎 #mtvmovieawards2016 💥+🌽! #straightouttacompton
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22. Claudia Jordan: ....
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23. 'Member that time I almost knocked a bajillion dollar camera off the car? Really? Yeah, me neither! #Greenleaf Episode 2 comin atcha!
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24. Full of love. #birthday #Cabo
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25. Oh hey! Look who just joined Snapchat
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