As we enter the main student lending season, two leading banks–U.S. Bank and Wells Fargo–have launched fixed-rate pricing on student loans. The rate on the U.S. Bank Fixed Rate Student Loan is 7.99%. Wells Fargo has fixed-rate pricing on four of its student loans, with rates as low as 7.75%. With this new pricing, the two banks are aiming to differentiate themselves from student lending competitors. They are also playing on a growing expectation that U.S. interest rates will rise in the coming months.
As these banks have a high profile in the student market, other leading private student lenders will be tempted to follow suit with their own fixed-rate offers. And the second quarter financials of these banks will be scrutinized in the coming weeks for any indications of a rise in student loan originations.