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Wells Fargo is exiting the student loan business
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Updated February 08, 2024
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Elisabeth Christopherson
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Fact checked byElisabeth Christopherson
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Elisabeth Christopherson is an accounting professional, fact-checker, and researcher with a background in online education. She has experience reviewing and editing accounting, business, and economic publications.
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We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more. Our Take As of January 2021, Wells Fargo exited the student loan business. All existing loans are now serviced by Firstmark Services, a division of Nelnet. Wells Fargo exited the student loan business and transferred servicing of their student loans in January 2021. Private student loans have transitioned to a new loan holder and repayment will be managed by a new loan servicer, Firstmark Services, a division of Nelnet. While it doesn’t charge origination or application fees, Wells Fargo has higher interest rates than you can find with other private lenders, and it has strict limits on how much you can borrow. And Wells Fargo has just one repayment option for most student loans. Because of its drawbacks, most borrowers will be better off working with other lenders with more options and competitive interest rates. Key Takeaways Pros and Cons Pros No application or origination fees Customers can qualify for automatic payment and loyalty interest rate discounts Parent loans can be forgiven if the student is permanently disabled Cons Interest rates may be higher than you’d get with federal loans Strict limits on total education debt permitted No alternative repayment options Company Overview Wells Fargo was founded in 1852 by Henry Wells and William G. Fargo. The company is currently headquartered in San Francisco, CA. It was created to meet a growing demand for reliable ways to send payments and access money. Many changes have been made since the start of the company. Recently, Wells Fargo has decided to get out of the student loans business. Table of Contents Wells Fargo Student Loan Review Pros Explained Cons Explained Loans Available Eligibility Prequalification Fees Discounts Repayment Rewards Cosigners Forbearance Disbursem*nt Refinancing Apply Final Verdict Frequently Asked Questions Methodology While federal student loans are a popular financing option because of their low interest rates and repayment benefits, private student loans can play a key role in paying for your education. Federal loans often have limits on how much you can borrow, so private loans can fill a gap and help you finish your degree. Wells Fargo offers private student loans for undergraduate, graduate, and vocational students—and their parents—and it doesn’t charge any fees. But private student loans offered by this lender do have some significant drawbacks to consider. Here’s what you need to know. Beginning in 2021, Wells Fargo is exiting the student loan business and transferring their student loans. Private student loans will be transitioned to a new loan holder and repayment will be managed by a new loan servicer, Firstmark Services, a division of Nelnet. Wells Fargo provides loans for undergraduate, graduate students, and parent borrowers. It also has loans for students in their residency, completing the bar exam, pursuing career training, or studying at community colleges. Depending on your dependency status, the most you can borrow each year in federal direct loans as an undergraduate student is between $5,500 and $12,500. If your tuition and room and board cost more than that, a private student loan from Wells Fargo can help cover the remaining amount. Wells Fargo’s undergraduate student loans have no origination or application fees and no prepayment penalties. You can borrow up to the total cost of attendance, minus the other financial aid you received. The limit Wells Fargo allows for all education debt—including federal student loans—is $120,000. If you are planning on getting a master’s degree, MBA, law degree, or other professional credentials, a graduate school loan from Wells Fargo can be a cost-effective alternative to federal student loans. Depending on what federal loans you qualify for, your interest rate could be 6.54% to 7.54% (until July 2023). But if you have good credit, you could qualify for a loan with Wells Fargo with a fixed interest rate as low as 5.64%. Most graduate loans are subject to the same $120,000 cap as undergraduate loans. However, graduate loans used for law or business degrees have a lifetime limit of $180,000. For graduate students in medical, nursing, dental, or other health-related programs, Wells Fargo offers MedCAP Medical School Loans. These loans give you a six-month grace period. But allopathic and osteopathic medical students can qualify for a 36-month grace period, giving them time to start their careers before they have to start making payments. The lifetime loan limit, combined with all other education debt, is dependent on your course of study: Medical residents who need help covering expenses related to their residency, medical boards, or relocation expenses may be eligible for Wells Fargo’s MedCAP-XTRA loans. There is a six-month grace period (36 months for allopathic and osteopathic students) and you can borrow up to $15,000 for qualifying expenses. (subject to lifetime loan limit) If you’re a law school student preparing to take the bar exam, you can use a Wells Fargo bar exam loan to pay for registration fees, test preparation materials, and your living expenses. You can borrow up to $12,000, and no payments are required until six months after you leave law school. If you are a parent of an undergraduate student, one option is to take out a federal Parent PLUS Loan. Be aware though that PLUS Loans have the highest interest rate of all federal loans—until July 2023, the interest rate is 7.54%. If you have good credit and are a Wells Fargo customer and can take advantage of its customer loyalty discounts, you could qualify for a lower interest rate with a Wells Fargo parent student loan.You can borrow up to $25,000 per year. Take note that deferring your payments until after graduation isn’t an option with Wells Fargo as repayment begins immediately. If you plan to attend a two-year school or a career training program rather than pursuing a bachelor’s degree, you may be eligible for a Wells Fargo loan for community colleges. With these loans, you can borrow up to $15,000 per year for a two-year public or private school, and $20,000 per year for a four-year proprietary school. These loans have a six-month grace period after you leave school. To qualify for a private student loan from Wells Fargo, you must meet the following requirements: Wells Fargo does not offer loan prequalification. To figure out if you’re eligible for a loan and what interest rate you’d receive, you must submit your application and go through a hard credit inquiry, which can impact your credit score. Wells Fargo doesn’t charge origination or application fees but does charge a $28 late fee. There is also no penalty if you choose to pay off your loan early, which is a smart way to save money on interest charges. You may be able to reduce your APR with one of the following discounts offered by Wells Fargo: With most Wells Fargo student loans, you have a six-month grace period, which means you don’t have to start making payments on your loans until six months after you graduate or leave school. Interest will accrue on your loans while you’re in college, but you aren’t required to make payments during this time. Wells Fargo loans for parents are the exception—the repayment period begins immediately for parent student loans. When it comes to rewards and benefits, borrowers are likely to be disappointed; Wells Fargo doesn’t offer any extra perks. That’s in stark contrast to other lenders like SoFi, which offer robust benefits, such as referral bonuses, career counseling, and member events. Wells Fargo doesn’t require applicants to have a co-signer. But if you don’t have excellent credit and a steady income, you can improve your chances of qualifying for a loan and a competitive interest rate by adding a co-signer to your application. Plus, Wells Fargo allows borrowers to apply for co-signer releases after 24 months of on-time payments. Wells Fargo does have support programs in place for borrowers experiencing financial hardships.If you can’t find a job, get laid off, or have an unplanned medical expense, you could qualify for short-term payment relief for up to two months if you’re up-to-date with your payments. Or, you may be eligible for Wells Fargo’s loan modification program, where your monthly payment is temporarily or even permanently reduced to make it more affordable for you. To discuss your options, call 1-800-658-3567. Loan discharge terms vary widely from lender to lender. With Wells Fargo, your loans will be discharged if the student borrower dies or becomes totally and permanently disabled. That’s the case even for parent student loans, which is a major advantage over Parent PLUS Loans. With PLUS Loans, the loans are only forgiven if the parent dies or becomes disabled, or if the student passes away. If the student is disabled, the parents still owe the full balance of the loan. Once you complete the online application and upload the necessary documentation, Wells Fargo will reach out to your selected school and ask it to certify the loan. Once certified, the bank will ask you (and your co-signer, if applicable) to sign a loan agreement. Once that’s complete, Wells Fargo will send the funds to your school’s financial aid office.According to the lender, borrowers should allow two to three weeks for the process to be completed. Wells Fargo offers student loan refinancing for both federal and private student loans.You can choose between fixed and variable-rate loans, and repayment terms range from five to 20 years in length. Note that Wells Fargo has exited the student loan business. They have sold and transferred their student loans to another provider. Unfortunately, some borrowers have reported issues with Wells Fargo.In the 2019 Annual Report of the Consumer Financial Protection Bureau (CFPB) Private Education Loan Ombudsman, the CFPB listed the number of complaints it received about private student loan companies. From Sept. 1, 2018, to Aug. 31, 2019, it handled 2,900 complaints about private student loan companies. Of those, 116—or about 5%—were about Wells Fargo. Most focused on issues dealing with the lender, while others were about problems affording monthly payments. You can reach customer support by calling 1-800-658-3567. Loan consultants are available Monday through Friday: 7:00 a.m. to 5:00 p.m. CST. Or, you can send a secure email through Firstmark's website. If you’re a Wells Fargo customer, you could qualify for a private student loan with a lower interest rate than you could get with a federal loan. However, it’s still a good idea to complete the Free Application for Federal Student Aid so you get all available financial aid options, including grants and federal student loans.If you decide that a private student loan from Wells Fargo is the right move, you can apply for a loan online. You’ll need to enter your school information, your Social Security number, permanent address, employment and income information, and the cost of attendance of your program and expected financial aid. Because Wells Fargo has so few repayment options and charges relatively high interest rates, we recommend exploring other private student loan lenders. You can likely find another lender that offers more favorable repayment terms and lower rates than Wells Fargo, without its restrictions and borrowing limits. No, Wells Fargo exited the student loan business in 2021. No, previous Wells Fargo student loans are being transferred and repayments will now be managed by Firstmark Services. All new and old Wells Fargo student loans will be managed by a division of Nelnet called Firstmark Services. Several different banks offer private student loans, including Citizens Bank, JP Morgan Chase, and many others. However, when thinking about private student loans it's important to consider whether federal loans are a better option. Private student loans often have higher interest rates, require a cosigner, and offer fewer options for pausing or reducing payments if a borrower runs into problems repaying the loan. Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders. We collected over 45 data points across more than 15 lenders—including interest rates, fees, loan amounts, and repayment terms—to ensure that our content helps users make the right borrowing decision for their education needs. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Wells Fargo Newsroom. "Wells Fargo Agrees to Sell Private Student Loan Portfolio." Federal Student Aid. "Subsidized and Unsubsidized Loans." Federal Student Aid. "Student Loan Forgiveness." Federal Student Aid. "Federal Interest Rates and Fees." Consumer Finance Protection Bureau. "What's a Credit Inquiry?" Consumer Financial Protection Bureau. "2019 Annual Report of the CFPB Private Education Loan Ombudsman," Pages 3, 14. Federal Student Aid. "Federal Versus Private Loans." Investopedia is part of the Dotdash Meredith publishingfamily. Please review our updated Terms of Service.:fill(white):max_bytes(150000):strip_icc()/Wells_Fargo-9cea2a7afa13456fb4a583ec4fab83a5.jpg "Wells Fargo Student Loan Review (3)")
Pros Explained
Cons Explained
Wells Fargo Student Loans Available
Undergraduate Student Loans
Variable Rates 2.68% - 9.46% Fixed Rates 4.53% - 10.72% Loan Amounts $1,000 up to total cost of attendance (subject to lifetime limit) Loan Terms 15 Years Graduate School Loans
Variable Rates 3.21% - 9.44% Fixed Rates 5.64% - 11.76% Loan Amounts $1,000 up to total cost of attendance (subject to lifetime limit) Loan Terms 15 years Medical School Loans
Variable Rates 3.07% - 8.01% Fixed Rates 4.82% - 9.54% Loan Amounts $1,000 up to $250,000 (dependent on course of study and subject to lifetime limit) Loan Terms 20 years Medical Residency and Relocation Loans
Variable Rates 7.46% - 7.69% Fixed Rates 9.76% - 9.99% Loan Amounts Loan Terms 7 years Bar Exam Loan
Variable Rates 9.99% - 10.21% Fixed Rates 12.45% - 12.67% Loan Amounts $1,000 - $12,000 (subject to lifetime loan limit) Loan Terms 7 years Parent Student Loans
Variable Rates 3.99% - 10.49% Fixed Rates 6.74% - 12.99% Loan Amounts $1,000 to $25,000 per year (subject to a lifetime limit of $100,000) Loan Terms 15 years Private Student Loans for Career Training and Community Colleges
Variable Rates 5.00% - 10.43% Fixed Rates 7.24% - 12.45% Loan Amounts $1,000 to $20,000, depending on your program (subject to a lifetime loan limit) Loan Terms 12 years Loan Eligibility
Is Loan Prequalification Available?
Loan Fees
Loan Discounts
Repayment Options
Rewards
Are Co-Signers Required?
Forbearance and Loan Discharge Options
Length of Time for Loan Approval and Disbursem*nt
Is Student Loan Refinancing Available?
Customer Service
Apply for a Wells Fargo Student Loan
Final Verdict
Frequently Asked Questions
Does Wells Fargo Still Offer Student Loans?
Will Previous Wells Fargo Student Loans Be Forgiven?
What Company Has Taken Over Wells Fargo’s Student Loans?
What Banks Offer Student Loans?
Methodology
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