If you know you are adding more fuel to the latest and greatest credit bubble - that of student loans - and the blended return will be zero at best, why do it? That's precisely the question JPM appears to have asked itself, and when taking into consideration the persistently rising debt rates and thus the even lower probability of repayment, came to the only logical conclusion possible:
- JPMORGAN CHASE TO STOP MAKING STUDENT LOANS -MEMO - RTRS
- JPMORGAN CHASE WILL STOP ACCEPTING APPLICATION FOR STUDENT LOANS ON OCTOBER 12
Which means that the government, that one lender that can't and won't pull out from the student loan bubble until it finally blows up, will be even more on the hook, and require yet another bailout of this latest $1+ trillion debt house of cards.
More from Reuters:
JPMorgan Chase & Co will stop making new student loans, 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 grow the business.
The company will stop accepting new applications for private student loans on Oct. 12, at the end of the peak borrowing season for this school year, according to a memo from the company to colleges.
"We just don't see this as a market that we can significantly grow," said Thasunda Duckett, chief executive for auto and student loans at Chase, in an interview.