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Wells Fargo Ended Its Student Loan Business. Here's What Borrowers Need to Know

Wells Fargo is getting out of the student lending business.

The bank announced at the end of 2020 that it would sell its $10 billion private student loan portfolio. But existing borrowers at the bank, which up until last year was the nation’s third-largest private student lender, are just starting to be affected. Their loans will now be serviced by Firstmark, a division of Nelnet — the Nebraska-based student loan servicer.

Wells Fargo had already stopped accepting applications to its private student loan and student loan consolidation products on Jan. 28. Manuel Venegas, a spokesman for Wells Fargo, said in a statement that the decision came after the company decided to cut back on non-core businesses, which included its student loan portfolio.

So, what does this mean for existing Wells Fargo customers?

Betsy Mayotte, president and founder of The Institute of Student Loan Advisors (TISLA), says that the most important thing borrowers should know is that student loan transfers between servicers and lenders happen all the time and typically don’t come with any negative consequences for the borrowers.

“When a loan is sold, the terms of the promissory note are maintained so the borrower should not see any changes in payments or interest rates,” Mayotte adds.