Amazon and Wells Fargo abruptly end student loan partnership

A partnership offering discounts on Wells Fargo student loans to members of Amazon Prime Student has abruptly — and quietly — ended.

An Amazon AMZN, +0.21% spokeswoman confirmed in an email to MarketWatch that the company is no longer offering the student loan promotion, which allowed Prime Student members to receive a half a percentage point discount on Wells Fargo student loan products. The promotion garnered significant media attention when it was announced slightly more than a month ago. The Wall Street Journal reported at the time that representatives from both companies had been in discussions for more than a year about the partnership. That same report said Wells Fargo WFC, +0.36% was describing the partnership as a multiyear deal.

It wasn’t immediately clear why the partnership ended. A Wells Fargo spokesperson didn’t immediately return a request for comment.

The deal had potential upsides for both companies. Student loan borrowers are a growing demographic of consumers that Amazon could convert to its Prime service through student loan discounts. And Wells Fargo could use the Amazon perk to draw borrowers in a competitive private loan landscape.

But consumer advocates derided the deal shortly after it was announced, arguing that it could push students away from the federal student loan system, which offers protections not typically available on the private market. Wells Fargo has also faced scrutiny over its student loan program. Last week, the bank agreed to pay $4 million to settle claims by the Consumer Financial Protection Bureau that the lender used illegal practices that meant some borrowers paid higher costs. (Though a spokesperson told MarketWatch that the company disagreed with the CFBP’s claims).

Pauline Abernathy, the executive vice president of the Institution for College Access and Success, an organization that advocates for equity in higher education, applauded Amazon for ending the partnership in a statement.

“We congratulate Amazon for deciding to stop promoting Wells Fargo’s costly private education loans,” the statement reads. “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.”

Filed in: Top News Tags: 

You might like:

New York City’s new Uber rules could make those $5 cancellation fees go away New York City’s new Uber rules could make those $5 cancellation fees go away
Next Avenue: Those ‘financial wellness’ programs at work are failing. Here’s why Next Avenue: Those ‘financial wellness’ programs at work are failing. Here’s why
The Ratings Game: Best Buy’s move into health technology for the elderly is a ‘great strategic fit’ The Ratings Game: Best Buy’s move into health technology for the elderly is a ‘great strategic fit’
NewsWatch: Walmart stock surge drives up retailers, negates J.C. Penney’s largest-ever plunge NewsWatch: Walmart stock surge drives up retailers, negates J.C. Penney’s largest-ever plunge
This solution could save millions of people from poverty in their old age This solution could save millions of people from poverty in their old age
Meet the tech-savvy upstarts who think they can finally give Realtors a run for their money Meet the tech-savvy upstarts who think they can finally give Realtors a run for their money
Economic Report: Mortgage rates tumble as housing starts to drag down the economy Economic Report: Mortgage rates tumble as housing starts to drag down the economy
Some adult children earn more when they live close to their parents—here’s why Some adult children earn more when they live close to their parents—here’s why
© 5719 Stock Investors News. All rights reserved. XHTML / CSS Valid.