Just about anything you could possibly ever need to buy is probably available on Amazon. Visit the site and you will see thousands—maybe millions—of products from categories like home care, apparel, personal care, electronics, and more. But apparently, you can also buy an education through Amazon now.
No, we are not talking about Rosetta Stone language education programs, though you can find this software. As a matter of fact the e-commerce giant is now teaming up with one of the largest student loan providers in the United States to make competitive student loans available through Amazon Prime.
Apparently, Wells Fargo hopes that the 0.5 percent discount available to “Amazon Prime Student” subscribers will attract more students to these lending programs.
“We are focused on innovation and meeting our customers where they are – and increasingly that is in the digital space,” explains Wells Fargo head of education financial services, John Rasmussen. “This is a tremendous opportunity to bring together two great brands.”
Amazon also makes sure to add that they have “a track record of investing in great offerings for students,” though, of course, these previous investments were not actual financial investments in individual students alone.
Now, on the one hand, the US student loan business does not necessarily need a bump in size. The industry is already worth a billion dollars, with Americans believed to be in debt to these holdings by as much as one trillion dollars. Those with a Wells Fargo variable rate student loan can expect to pay between 3.39 and 9.03 percent in interest while those with a fixed loan could expect to pay between 6 and 11 percent.
Of course, says college and scholarship search site Cappex.com publisher, Mark Kantrowitz, Amazon’s move towards this offering is not exactly about saving students money. He says that “Amazon is probably hoping that students will continue with Amazon Prime after they graduate, and Wells Fargo is probably hoping this will increase their loan volume,” noting, though, that it does seem symbiotic to all parties.
Still, Institute of College Access and Success vice president Pauline Abernathy argues, “Amazon and Wells Fargo are trumpeting a discount while burying the sky-high rates on these private loans and without noting that they lack the consumer protections and flexible repayment options that come with federal student loans. It is a cynical attempt to dupe current students who are eligible for federal students loans with a record-low 3.76 percent fixed interest rate into taking out costly private loans with variable interest rates currently as high as 13.74 percent.”
Like all things, then, it seems time will tell; and with a potential overhaul on student loans coming from the next presidential incumbent, this has never been more true.