Amazon Getting Into Student Loans

(RTTNews) - Online retail giant Amazon.com Inc. (AMZN) is entering into the student loan market by partnering with lender Wells Fargo & Co. (WFC).

Under the deal, the companies will provide a new interest rate discount for Amazon Prime Student customers who apply for Wells Fargo's private student loan products. The discount will be applied only to new loan applications received on or after July 21, 2016.

Wells Fargo is offering a 0.50 percent interest rate discount to Amazon Prime Student customers. This interest rate discount can also be added to a 0.25 percent interest rate reduction for enrolling in Wells Fargo's automatic monthly loan repayment plan and any interest rate discount tied to a Wells Fargo global promotion.

The new partnership between Amazon and Wells Fargo comes amid rising costs of college education. Private student lending, which had tumbled during the recession, is again on the upswing with banks returning to the segment.

While reporting its second-quarter financial results earlier this week, Sallie Mae (SLM), a large private student lender, said its private education loan portfolio grew 32 percent to $12.2 billion.

Wells Fargo Education Financial Services, the student lending arm of Wells Fargo, currently serves more than 1.05 million student, parent and family customers in all 50 states. The lender provides private student loans directly to consumers, through the Internet and at more than 6,000 Wells Fargo banking stores to help customers finance their education.

Amazon Prime Student gives college students unlimited free two-day shipping on more than 30 million items in addition to special offers and promotions for students.

Students can sign up for a six-month, sponsored trial of Amazon Prime Student to access these benefits. They will also get access to unlimited streaming of tens of thousands of movies and TV shows with Prime Video and free unlimited photo storage with Prime Photos.

After the six-month period, the subscription-based service charges $49 a year, half the price of a regular Amazon Prime membership, and includes over a million songs with Prime Music and one free pre-released book a month with Kindle First.