The ACA member company aims to transfer servicing to a third-party provider and stop student loan originations starting Feb. 1, 2024.
12/05/2023 2:40 P.M.
1 minute read
Last week, Discover Financial Services announced it is planning to explore the sale of the Discover Student Loans portfolio, according to a recent press release.
The company’s Board of Directors has given the green light for this initiative, emphasizing the pursuit of strategic alternatives for the Discover Student Loans business.
As part of this shift, Discover intends to transfer the servicing of these loans to a third-party provider and shift its focus on optimizing returns, focusing on core banking products, and delivering long-term shareholder value.
“We are committed to a path forward that enables a seamless transition for our customers as they advance their education and financial goals,” said John Owen, Discover’s interim CEO and president.
Effective Feb. 1, 2024, Discover will stop accepting new applications for student loans. However, it’s crucial to note that this decision will have no impact on existing Discover Student Loans customers, their loans, or their payment schedules at the present time.
Discover has enlisted the services of Wells Fargo Securities, LLC as its financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor to facilitate the exploration of strategic alternatives for the Discover Student Loans business. The process’s completion timeline remains open-ended, and the company has clarified that it will disclose developments only if and when the board approves a specific transaction or deems further disclosure appropriate.
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