JPMorgan Chase to Restrict Student Loans to Just Customers

JPMorgan Chase, the nation’s largest bank, is sharply limiting its private student loan business to only existing customers starting in July.
Banks and other private student lenders have been diminishing their role in the student loan market since the federal government in 2010 stopped guaranteeing loans that originated with private lenders
JPMorgan’s decision – and a complete halt by U.S. Bancorp to accepting student loan applications – follows the increasing U.S. scrutiny of the student loan market by the Consumer Financial Protection Bureau.
The bureau now has supervisory authority over banks and nonbanks that issue student loans.  It has started accepting complaints from anyone with problems getting a private student loan, repaying those loans, or managing a student loan that has gone into default and may have been referred to a debt collector.
“The private student-loan market has continued to decline and government programs have expanded to help more students and their families,” Steve O’Halloran, a spokesman for the New York-based JPMorgan, said today in an e-mail.
Chase customers must have a deposit account, loan or credit-card relationship to apply for a private student loan starting in July. The lender will continue to service existing student loans and work with financial aid offices on loan certifications.
Sallie Mae is the largest private student loan provider with about $36 billion in lending.
U.S. student loan debt from private sources and federal programs has hit $1 trillion for the first time, according to the CFPB, easily surpassing U.S. total credit card debt.

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