Why Amazon Wants to Help You Save Money On Student Loans
Amazon is giving boosting its Prime Student program the old college try.
In a curious pivot, the online retail giant announced yesterday that it’s now offering discounted student loans for a select group of its customers through a freshly-inked partnership with Wells Fargo bank.
The catch, because you know there is one: To be eligible for a 0.5 percent discount for private student loans via the new Amazon and Wells Fargo Education Financial Services initiative, you must be signed up for an Amazon Prime Student subscription, which costs $49 per year after the six-month trial expires.
Additionally, Prime Student subscribers who have existing private student loans through Wells Fargo can apply through the Amazon partner program to consolidate or refinance their loans.
The unusual move, of course, is mutually beneficial for both behemoths by design. Amazon increases its Prime Student membership sales and Well Fargo increases its online exposure to students -- and the amount of money and interest approved borrowers will fork over to the bank for up to decades to come.
Is dabbling in the private student loan biz a wise branding move for Amazon, some consumer advocates wonder? Alexander Holt, a policy analyst for New America, suspects not.
“Amazon is taking a reputational risk for a very low payoff,” Holt told Inside Higher Ed. “It’s a big market. But it’s not huge and it’s always run extreme reputational risk for the companies involved.”
Amazon, for its part, however, makes it crystal clear in a lengthy program disclaimer titled “Important information and footnotes,” that it is “not a lender.” And, despite its new partnership with Wells Fargo, it “is not affiliated with Wells Fargo.” Also noted in the disclaimer: “Wells Fargo reserves the right to modify or discontinue interest rate discount program(s) for future loans or to discontinue loan programs at any time without notice.”
Did you catch that? At any time without notice. Read the fine print, kids. Always read the fine print.