J.P. Morgan Chase and Co. (JPM) will no longer provide student loans because competition with federal government programs has become too stiff, Reuters reported.

Citing a memo from JPM to various colleges, the nation's largest bank said they would no longer accept applications for student loans on Oct. 12 this year, the end of peak borrowing season for students.

"We just don't see this as a market that we can significantly grow," said Thasunda Duckett, chief executive for auto and student loans at Chase. She said no longer giving out student loans "puts us in a position to redeploy those resources, as well as focus on our number one priority, which is getting the regulatory control environment strengthened."

Last year, Chase announced it would only give student loans to existing customers. The bank serves 64 million customers with 5,657 branches and only made $200 million off of giving student loans to 12,500 people.

At the end of June, the bank's student loan portfolio held $11 billion dollars, good for not ever half of one percent of their $2.44 trillion assets. The portfolio was made up of $5 billion of private loans and $6 billion of loans backed by government guarantees, which are now discontinued. In 2010, Congress voted to bypass the banks and lend directly to students and Chase's portfolio has been shrinking every year since.

Private student lending has decreased sharply since the financial crisis, declining to a total of $6 billion in 2011-2012 from $23 billion in 2007-2008, according to College Board data.

President Barack Obama has been on the forefront of many issues surrounding college affordability and student loans. A month ago, he signed a bill tying federal student loan interest rates to the financial market. The move keeps the rates low for now while the economy is still hurting, but would raise them as it is expected to improve. The bill was a rare bipartisan agreement on an issue that was hotly contested on either side.

The President also recently released a formal plan to lower the cost of college in general, a proposal that included a rating system for higher education institutions.