Friday, August 8, 2008

Wachovia Drops Private Student Loan Program

Wachovia is the latest student lender that has announced it will no longer be issuing private student loans. This comes a few weeks after the company reported that had lost $8.9 billion dollars in the second quarter. Previously, Wachovia’s subsidiary, Wachovia Education Finance, had been the sixth largest student lender in the United States. The company currently has $9.9 billion in federal and private student loans on the books. Banks have been forced by the difficult credit environment to dramatically tighten lending standards in the face of mounting losses from bad loans.

CNN Money reports that a spokeswoman for Wachovia, Ferris Morrison, did not get into why the company decided to halt their program, stating "At this time, we felt it was prudent."

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