Exciting (and yet not so surprising news) from Amazon, who recently announced it will be stepping into the student-loan marketplace together with Wells Fargo as it's lending distributor. The new partnership is a clear win-win, as Amazon shoppers will hopefully become Amazon Prime subscribers and Wells Fargo will enjoy a stream of new borrowers. This new source of competition to online student lenders like CommonBond and SoFi may lead to a pricing-duel, as they will most likely need to offer similar interest-rate discounts as Wells Fargo plans to now offer through Amazon.
Private student lending, which plummeted during the recession, is rising again. Five of the largest private student lenders, including SLM Corp., better known as Sallie Mae, Wells Fargo and Discover Financial Services Inc., distributed $6.46 billion in loans between July 2015 and March 2016, up 7% from the same period a year earlier–and the fifth consecutive year of increases, according to data released this month by MeasureOne, a San Francisco firm that tracks the market.