Wachovia to OK fewer student loans
Published: Thu, Aug. 07, 2008 12:30AM
Modified Thu, Aug. 07, 2008 01:24AM
E-Mail
Print
tool name
closeCHARLOTTE -- Wachovia is cutting back on student loans.
At the close of business Wednesday, the Charlotte bank stopped accepting applications for private, undergraduate student loans. The bank will continue issuing private loans for graduate students, and it will also continue issuing student loans backed by the federal government.
In a letter sent to colleges Tuesday, Wachovia said the move was "in light of the current overall financial industry environment."
More Business
Student loans already issued will not be affected.
Wachovia has about $9.9 billion in student loans on its books, encompassing about 4 percent of its consumer portfolio. The bank does not break down what percentage of its student loans are private, but a spokeswoman for the bank said it was "a very small portion."
Private student loans can be more lucrative for banks than federal student loans, but they can also be riskier. Their interest rates are determined by the market, so they can command higher rates than federally backed loans, but they have no government guarantee.
Other banks also have started to put the brakes on private student loans, including Bank of America of Charlotte. In April, Bank of America discontinued issuing all private student loans.
All rights reserved. This copyrighted material may not be published, broadcast or redistributed in any manner.
Get it all with convenient home delivery of The News & Observer.
The News & Observer is pleased to be able to offer its users the opportunity to make comments and hold conversations online. However, the interactive nature of the internet makes it impracticable for our staff to monitor each and every posting.
Since The News & Observer does not control user submitted statements, we cannot promise that readers will not occasionally find offensive or inaccurate comments posted on our website. In addition, we remind anyone interested in making an online comment that responsibility for statements posted lies with the person submitting the comment, not The News and Observer.
If you find a comment offensive, clicking on the exclamation icon will flag the comment for review by the administrators, we are counting on the good judgment of all our readers to help us.
