Major Lender to Stop Making Federal Student Loans

July 9, 2009

U.S. Bank, the sixth largest provider of federally guaranteed student loans, has told its customers that it will stop doing so after this fall, Student Lending Analytics reported Wednesday. U.S. Bank told college officials that it would end its activities in the Federal Family Education Loan Program by September 25. U.S. Bank does not service the loans it makes, and so would have no role in the Obama administration's proposed plan to end the guaranteed student loan program, and relatively little role even in the alternative setup proposed this week by a group of loan providers hoping to sustain elements of the lender-based program.

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