Discover Financial Services (NYSE: DFS) today announced that the Company’s Board of Directors (the “Board”) has authorized Discover management to explore the sale of the Discover Student Loans portfolio and the transfer of servicing of these loans to a third-party provider as it pursues strategic alternatives for the Discover Student Loans business.
Additionally, Discover will stop accepting new applications for student loans February 1, 2024. There is no impact to current Discover Student Loans customers or their loans or payments at this time.
“Discover’s Board regularly reviews the strategic fit of all of our businesses, with a focus on providing exceptional customer service and allocating resources to optimize returns,” said John Owen, Discover’s interim CEO and President. “During a recent review, the Board determined that exploring the sale and transfer of servicing of Discover’s student loans is aligned with those priorities, better enabling Discover to focus on our core banking products, capitalize on our growth opportunities and deliver 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.”
Discover has retained Wells Fargo Securities, LLC as its financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor to support its exploration of strategic alternatives for Discover Student Loans.
There is no deadline or definitive timetable set for completion of this process, and the Company does not intend to disclose developments unless and until the Board approves a specific transaction or determines that further disclosure is appropriate. Any decision by the Board to pursue or not pursue a strategic alternative for Discover Student Loans will be aligned with the Board’s objectives of maximizing shareholder value and strengthening the Company’s businesses and will be subject to then prevailing market conditions.