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BofA to stop issuing ‘private’ student loans

/ Source: The Associated Press

Bank of America says it plans to stop issuing "private" student loans, or those not backed by the government.

The Charlotte, N.C.-based bank says it plans to continue issuing government-backed student loans. Most student loans are issued under government programs.

The federal government offers subsidies to lenders under these programs and reimburses banks when students fail to repay loans.

The company did not say why it is shutting down this line of business, though a number of lenders have done so lately due to tight credit markets.

Private student loans make up less than 15 percent of Bank of America's $6 billion in student loans.