The firm remains concerned about Discover’s reliance on credit leverage for earnings and uncertainty regarding top-line growth. Further, the firm believes that the private student loan business would remain down this year for Sallie Mae, the largest player, and credit losses are likely to remain elevated next year, and thus the firm remains concerned over the near-term growth prospects of the business. Furthermore, the business could face additional regulatory scrutiny from the Consumer Financial Protection Agency once it is formed, as well as the ongoing Congressional debate over the non-dischargeable status of private loans in bankruptcy.