(Bloomberg) -- Wells Fargo & Co. is pulling back from student lending as the U.S. surge in coronavirus cases threatens to further disrupt higher education and the broader U.S. economy.
The firm, which has been reviewing businesses under new Chief Executive Officer Charlie Scharf, said student loans for the upcoming academic year will be granted only to people who submitted applications before July 1 or to customers who already have an outstanding balance on a prior student loan from the bank.
“Wells Fargo has decided to narrow its student-lending focus,” Manuel Venegas, a spokesperson for the bank, said in a statement.
The pandemic is disrupting academic programs and undermining the ability of many borrowers to repay as it halts commerce and costs tens of millions of Americans their jobs. Already, more than 40 million student-loan accounts were in deferment as of mid-June, according to Equifax.
San Francisco-based Wells Fargo had a $10.6 billion private student-loan book at the end of the first quarter -- a portfolio that's been shrinking in recent years. Private makes up about $130 billion of the $1.7 trillion student-debt pie, according to data provider MeasureOne.
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