Discover Said to Mull Possible Sale of Its Student-Loan Arm (1)

Discover Financial Services is exploring the potential sale of its student-loan business as the company seeks to clean up operations in the aftermath of a series of regulatory lapses, according to people familiar with the matter.

The unit, which includes a $10.2 billion portfolio of private student loans, could fetch interest from alternative asset managers or rival student-loan platforms, some of the people said, asking not to be identified discussing confidential information. Deliberations are ongoing and Discover could opt to retain the business, according to some of the people.

A Discover spokesman declined to comment.

“We think it makes sense ...