US Bank pulls out of student loan bizby Annie Baxter, Minnesota Public Radio
ST. PAUL, Minn. — U.S. Bancorp says it has pulled out of the private student lending business.
U.S. Bank will continue to service its existing loans, but it stopped taking new applications for student loans on March 29, 2012.
The Minneapolis-based bank says it was a "relatively small player" among private student lenders with less than 2 percent of the market.
At the end of March, student loans constituted roughly $4.6 billion or 2 percent of the company's total loan portfolio.
Amanda Bardonner, the state chair of the Minnesota State University Student Association and a student at St. Cloud State University, said U.S. Bank's departure from the private student loan market won't make a big difference for students, as it wasn't a big loan source.
"A lot of times what you see is the students who may have had a loan through them, it's because they bank with them," Bardonner said. "It might've been a short-term student loan."
JPMorgan Chase, the largest bank in the country, says it's scaling back its student loan operations.
The federal government has largely taken over the student loan market. The private lenders who remain face greater regulator scrutiny.