A partnership between Amazon and Wells Fargo that offered discounted student loan interest rates to Amazon Prime Student members has ended, the online retailer said.
The promotion, which was announced in July, made those Prime members eligible for a 0.5 percentage point reduction on interest rates for private student loans taken out through Wells Fargo Education Financial Services. Deborah Bass, a spokeswoman for the online retailer, said that the promotion had ended but did not offer a reason for the move.
Pauline Abernathy, executive vice president of the Institute for College Access and Success, welcomed the end of the deal in a statement. "Private loans are one of the riskiest ways to pay for college, with none of the flexible repayment options and consumer protections that come with federal student loans," she said. TICAS and other student advocate groups have pointed out that students under 24 can borrow up to $31,000 in aggregate federal student loans. Other higher ed policy experts say that there's nothing wrong with taking out private student loans to pay for the cost of college above the federal borrowing limit. But more than one questioned why Amazon would get involved with the student loan sector when the promotion was announced. (Note: This paragraph has been updated from an earlier version to correct information about the federal loan limits.)
The Wells Fargo student loan division in August was hit with a $3.6 million penalty by the Consumer Financial Protection Bureau in August after the agency identified practices that unfairly increased costs and penalized student borrowers.