According to the Wall Street Journal, online retailer Amazon has entered into a partnership with Wells Fargo to offer the bank’s discounted student-loans to select Amazon shoppers. The “Prime Student” interest rate discount will be offered to students who want loans to attend college and those who want to refinance existing loans.
Amazon's offer is among private student lenders trying to stand out by discounting in an increasingly competitive market. Wells Fargo, the second-largest private student lender by origination volume, will shave a half a percentage point off the interest rate on student loans it extends to applicants who are members of Amazon’s Prime Student. The subscription-based service charges $49 a year, half the cost of Amazon Prime, and offers free two-day shipping and unlimited instant streaming of movies, among other perks.
Private student lending plummeted during the recession but is rising again. Five of the largest private student lenders, including Sallie Mae, Wells Fargo and Discover Financial Services Inc., distributed $6.46 billion in loans between July 2015 and March 2016, up 7% from the same period a year earlier.
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