Schlupp's trial period with the 12-time Premier League champions has been extended into a third week.
Asked whether the 20-year-old may join Sir Alex Ferguson's side, Pearson told the media: "I don't know at this point. He's still at Manchester United. It's as it was.
"It's an arrangement between the two clubs and Jeff is enjoying himself there. Both clubs are happy and we will see where it takes us."
The move is the latest in a burgeoning relationship between the npower Championship club and United, which has seen Ritchie De Laet and Danny Drinkwater sign for City after leaving Old Trafford and Michael Keane and Jesse Lingard arrive on loan deals.
Schlupp, who came through the youth ranks at Leicester, has made five starts this season but the majority of them have been at left-back as cover for Paul Konchesky.
It is also understood that he has played in defence during his time with United.
The Germany-born Ghana international made an impact at Brentford as a striker during a loan spell in 2011, scoring six times in 10 appearances.
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