‘No More Student Loans for Non-members’ JPMorgan

Banks in the United States are taking tighter measures against lending to clients who are not members of the entity. This new regulation is going to be adopted by the JPMorgan Chase & Co., as they would cease to give student loans.

According to Steve O’Halloran, a spokesperson of the bank from New York, the loan given to private persons when it comes to education has decreased. He adds, that the government is stepping up and is providing the aid that students need.

JPMorgan will now demand Chase accounts from their clients. Furthermore, they could only apply for a loan or credit-card to get the financial aid. The bank will still go on in collecting and processing loans that they had given to student. They will also continue to negotiate with other entities that are engaged in giving financial aids to students.

According to the American Banker, the decision of JPM came after they were cutting off loses. Student loans composed about $1 trillion of the bank’s shops and $2.27 trillion was recorded in its trial balance.

The loans decreased 15% ($13.4 billion) in 2009 and the doubtful accounts of the company increased in a very alarming rate. The uncollectible account was at 72% since 2009, this is according to JPM itself. In 2012 the bank made lesser transactions with student loans, they cut the number to only $300 million from 2010 which was $1.9 billion.

Since July of 2010, private entities were no longer allowed to give loans to those who were given financial help by the government. The financial aid for students became the main reason for the nation’s debt.

The Consumer Financial Protection Bureau is now conducting an investigation on private financial entities. They are also receiving protests from clients about them. For now, the agency has identified the largest money lender to be Sallie Mae, which had given $36 billion for student loans.

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