Discover Financial Services will sell a portfolio of student loans to buyout giants Carlyle and KKR for up to $10.8 billion, the credit card-focused lender said on Wednesday.

The loans will be sold at a premium to their principal balance of nearly $10.1 billion, the company said.

Discover, which had been weighing a sale of the portfolio since November, is one of a handful of lenders that have exited the space in recent years.

The deal could also de-risk Discover's loan book as it prepares to be acquired by Capital One.

Student debt has become a political hot-button in the U.S.

In 2022, President Joe Biden rolled out a measure that would have forgiven $430 billion of such debt, but his plan was thwarted by the Supreme Court last year after opposition from conservative-leaning states.

Nearly one in five adults say the issue will influence their vote, according to a survey from Bankrate.

Separately, Capital One said on Wednesday it would commit $265 billion over five years to lending, philanthropy and investment if its takeover of Discover goes through.

  - Reuters