Wells Fargo plans to sell an $8.5 billion portfolio of federal student loans to Navient, the educational loan servicer that recently split off from Sallie Mae.
A purchase price was not announced. The transaction supports Wells Fargo's "ongoing strategic focus on its private student-lending business" the bank said in a press release Thursday.
Wells Fargo stopped issuing loans through the Federal Family Education Loan Program in June 2010, when a law overhauling the student loan business took effect. The law prohibited the federal government from subsidizing banks to issue federally insured loans.
The loans included in the Navient sale have been serviced since 2011 by American Education Services and Xerox Education Services.
The sale will take place in a series of transactions, most of which will close this quarter.
Wells Fargo's Education Financial Services currently serves 1.3 million customers and has $11.9 billion in outstanding balances.
Wells Fargo is based in San Francisco. Navient has its headquarters in Wilmington, Del.