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JP Morgan/Chase To Stop Making Student Loans

From Reuters:

Exclusive: JPMorgan to stop making student loans – company memo

By David Henry | September 5, 2013

NEW YORK (Reuters) – JPMorgan Chase & Co will stop making student loans in October, according to a document reviewed by Reuters on Thursday, after the biggest U.S. bank concluded that competition from federal government programs limits its ability to expand the business.

This is exactly what we predicted would happen when Obama took over the student loan program. And it is a highly intended consequence.

And this is also is a preview of what is going to happen under Obama-Care. Because once the government gets involved, they suck all of the oxygen out of the room, and eventually the private sector companies leave the field.

The company will stop accepting applications for private student loans on October 12, at the end of the peak borrowing season for this school year, according to a memo from the company to colleges.

The move means less competition for remaining players in the market, such as Wells Fargo & Co and Discover Financial Services.

Who will soon also quit.

"We just don’t see this as a market that we can significantly grow," said Thasunda [sic] Duckett, chief executive for auto and student loans at Chase, in an interview on Thursday

The decision follows the bank’s move last year to make education loans available only to existing Chase bank customers. The retail bank has some 64 million customers and 5,657 branches. Last year, Chase made education loans to 12,500 people for a total of about $200 million…

Private lending for education declined sharply after the financial crisis, falling from $23 billion in the 2007-08 school year to $6 billion, or less than 10 percent of total student loans, in 2011-12, according to data private lenders have cited from The College Board…

"Financial crisis" my Aunt Fanny (Mae). Banks started dialing back on making student loans once the government got heavily involved. And specifically, after Obama decided he should control all student loans from the White House.

This article was posted by Steve on Friday, September 6th, 2013. Comments are currently closed.

6 Responses to “JP Morgan/Chase To Stop Making Student Loans”

  1. Noyzmakr says:

    And we all know what happens when you remove competition. Those Suckers Students think it sucks now…..wait ’til the government fixes it.

    • canary says:

      Anyone that get’s a student loan isn’t going to be able to get a loan anywhere. They are going to end up with the government breathing down their back for the rest of their lives.

      They are not reading where if the student get’s behind paying back their student loan the federal govt can demand payment of the entire loan.

      The government will keep them from getting licenses.

      The type of license is not specified, but let’s think medical licenses in the medical field.
      Drivers? Licenses? Teacher’s licenses.

      To think Lawyers were able to be licensed getting way behind in their student loans until they ran for President.

      Engineering licenses, manicurist licenses, yoga teacher licenses. Licenses to fish and hunt.
      A friend of mine in Kansas is always telling me about all the licenses they have.

      With the IRS and 3 other top Federal agencies in the US running health care, there will be no problem in suspending every license that exists.

      What barcode does your forehead hold.

    • Noyzmakr says:

      No no no. Don’t you see? The democrats are just setting up yet another scheme to buy votes.
      Once enough students get to the point where they are at wits end about paying back their student loans, the democrats will come along and promise to forgive them their debt to buy their votes in a future election. The republicans won’t be able to say no because they will be portrayed as against young people. Then education will be totally paid for by government and they will choose who goes to college and university. Hint: No conservative’s kids will make the grade…so to speak.

      The dems think way out in the future. Not small like the republicans. We make 4-8 year plans. They make 100 year plans.

    • canary says:

      Obama just talked about forgiving student loans. Remember he does the opposite and his present guidelines criminalize the student who takes a loan. This doesn’t just effect their credit.

  2. untrainable says:

    Once the government is the only place to get a student loan, you can bet your bottom dollar that any talk of higher education being a civil right will abruptly end. Interest rates will go up sharply (and will no doubt be blamed on evil republicans) and we’ll see how high the price of government subsidized tuition can get.

  3. GetBackJack says:

    Nah. They did the math and realized the cow is dry. They’re getting out before the crash.

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