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Wells Fargo will cut interest rates on some student loans

Student loan relief on the way

Wells Fargo, the largest private student lender in United States, is launching a new loan modification program that includes an option to lower the interest rate for certain qualified borrowers.

The bank will work with customers on a one-on-one basis to determine the appropriate course of repayment and could cut interest rates to as low as 1 percent.

The program will be available to borrowers whose employment or income has changed since they began repaying their loans. The loans must be late, but not in default or delinquency.

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"We started to hear more and more feedback that solutions that we had for them in the past weren't working enough for them because of the tough economic times for students coming out of the financial crisis, so that's what stepped up our priority," John Rasmussen, head of education financial services at Wells Fargo, told CNBC.

Discover has also announced a new student loan restructuring plan, but has not released details.

In October, the Consumer Financial Protection Bureau said the lack of transparent loan modification options a "pain point in the market."