Amazon enters the student loan business

 
Next time you're ordering your textbooks from Amazon, you can also order a student loan.
Amazon is entering the private student loan business through a partnership with Wells Fargo.
Wells Fargo's student lenders will offer a 0.5 percent interest rate discount to members of Prime Student, Amazon's half-price version of Prime for college students.
Amazon already offers small business loans through Amazon Lending, the invitation-only loan program for third-party sellers it launched in 2012. But this will be the company's first involvement in the student loan market.
The interest rate discount will be available for all Wells Fargo student loans, including both new loans and loan refinancing.
“We are focused on innovation and meeting our customers where they are – and increasingly that is in the digital space,” John Rasmussen, Wells Fargo’s head of Personal Lending Group, said in a press release. “This is a tremendous opportunity to bring together two great brands.”
As for Amazon, the company said in a statement, "Amazon has a track record of investing in great offerings for students, starting with the Amazon Prime Student program.  We’re excited to extend this new offering from Wells Fargo to our Prime Student members."
Private student loans are a booming industry, albeit one that has faced criticism. For the 2014-2015 academic year, students and parents borrowed $106.1 billion, 10 percent of which was nonfederal loans, according to the College Board. According to the Wall Street Journal, the amount of money loaned to borrowers by the five biggest private lenders between July 2015 and March 2016 grew 7 percent from the prior year.
Wells Fargo is a distant second to the nation's largest private student loan lender, Sallie Mae.
Students who accept financial aid packages with predetermined federal loans likely won't be tempted by Amazon's offer. But those already looking to subsidize federal money with private loans, where interest rates can depend on the borrower's credit score, could be intrigued by a promised half-percent discount.
Those already borrowing from Wells Fargo, too, could be persuaded to sign up for Prime Student, which costs $49 a year.