Whether large or small, banks have never had a lot of financial incentive to issue student loan ABS paper, but some market players say the shifting tides of the student loan business might change that.

Earlier this year, SunTrust Bank made its debut as a student loan ABS issuer, coming to market with a $765 million transaction in March, via Citigroup Global Markets. Although SunTrust joins KeyBank as a bank issuer of student loan-backed securitization deals, market observers note that KeyBank is the only one in that asset class that comes to market regularly. True enough, banks have little incentive to securitize their government-guaranteed student loan portfolios.

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