News of a business deal between two very large companies, Amazon and Wells Fargo, sheds some hope, or a respite, on the student loan situation that is so commonly experienced by college students. In short, beneficiaries of this deal receive a 0.5% discount on their student loan interest rates.
Not just any college student can benefit from this partnership. This discount is being offered to students who are enrolled in Amazon Prime Student and have a private student loan with Wells Fargo Bank. Keep in mind that only Prime Student members are eligible for this discount, so the borrower must be eligible for that program, namely enrolled in school.
Amazon is one of the largest product marketplace and shipping companies in the United States and worldwide. The gargantuan marketplace has over 300 million accounts as of last year, and it exceeded $100 billion in revenue during 2015. Additionally, Wells Fargo is one of the largest private banks in the United States with over 6000 locations. Their net income at a glance exceeds $20 billion with almost 42 trillion in assets, and they reach out to over a million borrowers.
At any rate, these two companies clearly have the revenue to mess around with student loans. While these two companies are not compensating each other for this deal, the benefits for each company are obvious. This deal simply adds another benefit to Amazon’s repertoire for its customers; one that is sure to attract more Prime Student accounts and users overall. Wells Fargo is in a position to provide loans with more attractive interest rate discounts than other competitors which is sure to increase business.
Despite the clear business goals, this is an interesting precedent set by Amazon and Wells Fargo. Student loans are talked about over and over again. Student loans are hurting young entrepreneurs. Student loans are keeping millennial workers from investing in 401(k). Student loans are stymieing the purchase of homes. The list goes on. It is an un-ignorable issue.
With that in mind, third party companies who normally do not have anything to do with student loans are beginning to dip their feet into the industry. This ties into a recent trend; for instance, employers have begun offering their own plans to help alleviate these issue. It is hopeful to hear that bodies other than the government are seeking solutions to a problem that is affecting an up and coming generation.