The increase in student loan consolidation products is credit negative for private SLABS given that prepayments by high-quality borrowers will rise, according to a Moody’s Investors Service report released yesterday.

On Aug. 2 Sun Trust Bank launched a loan product that consolidates a borrower’s private student loans. Additonally, the second-largest private student loan lender Wells Fargo and numerous credit unions have also started offering private consolidation loans, the rating agency noted.

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