Amazon Offering Student Loans at Discounts to Prime Members
On Thursday, the giant in e-commerce and Wells Fargo the San Francisco based bank announced they have partnered to supply customers of Amazon with student loans.
The bank will be giving an interest rate discount for new loans of 0.5% to students who are members of Amazon’s, Amazon Prime Student a service that is subscription based for college student which costs 50% of the regular cost of Amazon Prime.
Wells Fargo called the new alliance with Amazon a marketing opportunity. The head of the bank’s personal lending arm said that the company is focusing on innovation and meeting customers where they are which on a more regular basis is in today’s digital space.
The goal of Amazon is to increase its membership of Prime Student, while the bank wants broader communication that it will help students and the families of students pay to attend college.
The spokesperson for Wells Fargo added that the program would enhance discounts offered by Amazon to students and is going to allow the bank to take advantage of the access Amazon has to college students.
Amazon, through its various channels as well as platforms will promote the new Student Prime and its stronger relationship with Wells Fargo.
In a short statement, Amazon simply said that the new program will add benefits to its members of Prime Student and is excited to extend the new offering.
The fine print found on the landing page for the program on Amazon.com clearly distances itself from the bank.
The content said that Amazon does not lend monies and has not direct affiliation with Wells Fargo, and therefore does not have an involvement with the origination or the underwriting of loans given be Wells Fargo.
One analyst who studies loan debt for students said that the announcement did not matter much in the big picture, as it is basically just one lender within a market that is a tiny slice of the whole pie that makes up student loans.
Undergraduate borrowers for the most part sign private student loans if they have reached their limit of federal loans. Graduate students do not have a cap for federal loans.
Therefore, the private loan markets remains small in comparison to the federal counterpart. It also shrunk tremendously during 2010 when President Obama’s administration made an overhaul of the student loan national system.