For those who remember, the product shipping juggernaut, Amazon, and top ten largest bank, Wells Fargo, entered a partnership with the intention of providing some minor student loan relief to its customers. The partnership guaranteed Amazon Prime Student members a 0.50% interest rate discount on their student loans. Keep in mind this only pertained to private loans for school that had to be from Wells Fargo specifically.
This partnership has now ended after lasting a grand total of a few weeks. The reasons for this have not been disclosed to the public, so any reasoning behind this is pure speculation (but that does not stop anyone).
This partnership cancellation follows the news of Wells Fargo suffering federal penalties and fines from the Consumer Financial Protection Bureau. The established bank was caught charging unnecessary late fees to borrowers; additionally, it withheld important information that was necessary for clients to manage their loans effectively.
After all of this came out, Wells Fargo was fined $3.6 million for “illegal student loan practices.” Wells Fargo was also required to refund around $410,000 to its student loan customers who were affected by the illegal penalties. This puts the overall penalty up to a grand total of $4 million.
It is not clear if this partnership between Amazon and Wells Fargo was cancelled due to this recent news, but it is a strong possibility that this was a contributing factor. In theory, an interest rate discount for Wells Fargo and Amazon student customers is contradictory in the face of illegal late penalties. This also removes any affiliation that Amazon may have had with the illegal practices which is an essential public relations move.
More information may be revealed in the future as to the exact reasoning for Amazon and Wells Fargo to part ways. At any rate, the option of earning a 0.50% interest rate discount for Amazon Prime Student members is now gone. With that being said, the partnership between these two companies set a precedent that can be followed. There may be potential for large companies with members in the college demographic to offer discounts through partnership deals with student loan lenders.