“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.