NEW YORK, Sept. 6 (UPI) -- U.S. bank JPMorgan Chase said it will exit the student loan business, where its revenues fell to less than $200 million in 2012, down from $6 billion in 2008.
The student loan market changed when the Obama administration adopted new rules making student loans more available directly from the government, The Wall Street Journal said Friday.
Moody's Investors Service said student loans from private banks had dropped from $25.2 billion in loans made in the 2007-08 academic year to about $8.1 billion in 2011-12.
Interest rates on private loans are often much higher than rates the government offers.
Discover Financial Services bought $2.5 billion of student loans in 2011 from Citigroup, but most large private banks are dropping their student loan businesses.
Bank of America Corp. dropped out in 2009, followed by Citigroup in 2010 and regional lender U.S. Bancorp in 2012.
A few, including Wells Fargo, are staying in the business.
"We are committed to the private student lending businesses," said John Rasmussen, head of Wells Fargo Education Financial Services.
In a memo sent to 200 colleges, JPMorgan said it would stop writing new student loans to its current customers. Last year, it halted new loans to borrowers who did not already have a loan with the bank.