The sheer size of the U.S. student loan market, at $1.2 trillion and counting, has attracted a growing number of financial technology startups looking to help student borrowers manage their debt.
Now Amazon is teaming up with Wells Fargo and entering the fray. The “everything store” plans to offer loans and loan refinancing to select customers enrolled as “Prime Students,” a half-price version of Prime membership designed for college-goers. Per usual, Amazon plans to compete on price, luring customers with the prospect of a half-percentage-point interest-rate discount.
By origination volume, Wells Fargo is the second-largest private lender in the U.S. Over the last year it has stepped up its digital initiatives in an effort to stave off upstart competitors like Social Finance, or SoFi.