CHICAGO – JPMorgan Chase & Co. announced today that it has reached agreement with Sallie Mae to end their student-lending joint venture, giving Chase sole control of its student lending business.
Chase and Sallie Mae will extend their loan origination and servicing agreement through August, 2010 for schools that want to continue to use the Sallie Mae platform for Chase or Bank One loans. In addition, Chase and Bank One will be required to sell new borrower loans to Sallie Mae if they are originated or serviced through Sallie Mae.
JPMorgan Chase, which merged with Bank One in 2004, will discontinue the suit it filed last month to dissolve the joint venture with Sallie Mae.
Effectively immediately, the Bank One Education Finance sales force will now market both Chase and Bank One-branded student loans using six of the country’s most popular origination/servicing platforms: ACS, AES, Ed Financial, Great Lakes, Nelnet and Sallie Mae, as well as other regional secondary market platforms.
“This agreement allows us to provide even greater flexibility and choice to schools and their students by providing the products and services they find most desirable to finance higher education,” said Scott Powell, chief executive of auto and student lending for Chase. “This also gives us control over this very important business and creates a strong platform for growth.”
In 2004, JPMorgan Chase was the largest originator of FFELP student loans, originating more than $6.4 billion under the Chase and Bank One brands.
