SAN FRANCISCO - December 1, 2011
Wells Fargo & Company (NYSE: WFC) announced today the reduction of fixed interest rates for the Wells Fargo Collegiate® Loan, Wells Fargo Student Loan for Parents, WellsFargo Private ConsolidationSM Loan and Wells Fargo Student Loan for Career and Community Colleges. The rate reductions range from .25 percent to .51 percent from Wells Fargo’s previous fixed rate student loans, and start at 7.24 percent for those who qualify.
As industry rates continue to remain low, Wells Fargo’s new fixed rates are being offered to coincide with peak season for graduates interested in consolidating their student loan debt and for those students who are in the midst of obtaining financing for second semester coursework.
In today’s economy, families are having a harder time affording college,” said Kirk Bare, SVP, Wells Fargo Education Financial Services. “The cost of education continues to increase faster than inflation. The recession has reduced personal income, equity in homes, and investments. We are reaffirming our commitment to customers by lowering our rates at a time when they may need it most.”
In addition to the new rate reduction, customers may qualify for existing discounts Wells Fargo offers on its student loans, depending on their situation:
- Borrowers who have an existing customer relationship with Wells Fargo may qualify immediately for additional rate discounts up to .50 percent on new loans.
- All Wells Fargo private student loan customers can reduce their interest rate further during repayment by 0.25 percent by setting up automatic payments.
- Wells Fargo Collegiate® Loan and Wells Fargo Student Loan for Career and Community College customers can lower their rates by an additional 0.25 percent through the Wells Fargo Student Graduation BenefitSM Program.
In determining interest rates for private student loans, a range of factors are considered. When a borrower applies for a loan, the borrower’s credit rating is reviewed as well as their income and employment history.
“When a student applies for a private student loan, we will start with checking their credit. However, college students are a unique subset of customers. They are often first-time borrowers establishing credit based on their future ability to pay resulting from the education they are pursuing,” says Bare.
Given typical credit requirements, most students choose to apply with a cosigner – usually a parent or relative – and lending decisions are based on the credit worthiness of the student and their cosigner.
“Determining the ability to repay by the borrower and the cosigner protects our customers against unnecessary borrowing and we believe facilitates successful repayment in the future,” says Bare. “Because the cosigner strengthens the application, the student is more likely to qualify for the loan and a more favorable rate.”
In May 2011, Wells Fargo introduced its fixed-rate option on most of its student loan products so that borrowers can choose which option works best for them. Variable rates continue to be offered on all of Wells Fargo’s student loans and usually offer lower starting rates than fixed rates. However, the fixed rate option offers customers the security of knowing what payments will be each month.
“When it comes to financing education, we encourage borrowers to look at all of their options – including grants, scholarships and loans from all sources – and make careful comparisons among all of their choices,” added Bare.
The Wells Fargo Collegiate® Loan, Wells Fargo Student Loan for Parents and Wells Fargo Student Loan for Career and Community Colleges do not have application, origination, or early repayment fees, and customers can defer payments until they graduate or exit school, or make payments while they attend school.
The Wells Fargo Private ConsolidationSM Loan is available with no origination or disbursement fees. Like the other loans, there are no fees or penalties for early repayment and additional rate reductions may be available for Wells Fargo customers. Loan consolidation is an option for borrowers who are no longer in school and have private student loan debt, borrowers who have private student loans through different lenders and are making a separate payment on each, or borrowers who have just one private student loan, but want to lower their monthly payments or extend their repayment terms.
Students and families interested in more information should call 1-800-378-5526 between 7 a.m. and 8 p.m. CT , Monday – Friday, visit wellsfargo.com/student/or speak with a personal banker at any Wells Fargo location nationwide.
About Education Financial Services
Wells Fargo Education Financial Services serves more than 1.9 million student and family customers in all 50 states and has been in the student lending business for 43 years helping customers make smart borrowing decisions to finance education. Education Financial Services provides customers with financial tips and tools to keep their finances on track while in school and prepare them financially for when they finish college. Wells Fargo markets its education products to colleges and universities, directly to consumers and through Wells Fargo Bank. As part of the organization’s commitment to education, during 2010 Wells Fargo provided $66 million to educational organizations, including $17 million in team member donations, which Wells Fargo matches dollar for dollar, up to $5,000 per team member.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With approximately 275,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 23 on Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.