Discover Financial Services (DFS.US), the parent company of online bank Discover Bank in the USA, announced that it will sell a student loan portfolio to private equity firms The Carlyle Group (CG.US) and KKR (KKR.US) for up to $10.8 billion, with a premium over the principal balance of the portfolio which is worth nearly $10.1 billion.

Discover Financial Services is currently waiting for its acquisition by Capital One (COF.US). The sale of student loan portfolios will help reduce loan risks. Student loans have become a popular political issue in recent years. President Biden has proposed to forgive $430 billion of student debt, but it was rejected by the Supreme Court last year.

If Capital One successfully acquires Discover Financial Services, it will commit to providing $265 billion in loans over the next five years.