First Marblehead cuts 500 jobs and reduces expenses

First Marblehead, a leading provider of financial solutions that help students achieve their dreams, has cut 500 jobs and is going to revive on the market after it has terminated its relationships with Bank of America.

First Marblehead helps meet the growing demand for private education loans by providing clients with an integrated suite of tailored design, implementation, and securitization services for private student loan programs.

The company had 920 fulltime employees in February. Jobs were cut at offices in Boston and Medford, Massachusetts.

In addition to job cuts, due to previous events – the severed relationships with Bank of America, that provided 15 percent of First Marblehead's revenue, and the cancellation of transaction with Goldman Sachs Group Inc. for $1 billion credit line – the company plans to cut costs by about $200 million a year.

First Marblehead has plunged 89 percent in the 12 months through May 2. The company announced that it would release its fiscal third-quarter results on May 8.