Quicken Loans will pay a $1,000 cash bonus to borrowers who pay off their loans by the end of the year, as a response to the government’s $5.2 trillion bailout of the troubled auto loan industry.
The company said Monday that it would forgive borrowers’ student loans by a maximum of $1.7 billion, or nearly two-thirds of the total loan forgiveness amount of $542.4 billion.
It will forgive the remaining $300 billion of the loans, or two-fifths of the loan forgiveness figure.
The new offer comes on the heels of a similar offer from Wells Fargo earlier this month.
Wells Fargo said it would pay $1 million in cash to any borrower who paid off their loan by the beginning of the calendar year.
The company’s loan forgiveness offer will be available to borrowers in states where Wells Fargo’s $2,000 payment was available to eligible borrowers through the Federal Student Aid Program (FSA).
The $2.5 billion offer also applies to borrowers with outstanding balances of more than $1 billion.
The $1-million cash bonus will not apply to federal loans, and borrowers in state-run financial aid programs such as Pell grants will be eligible for the additional cash.
The federal government and the private sector are facing the largest student loan forgiveness crisis since the Great Recession.
The government is set to repay $7 trillion in loans over the next 10 years, according to the U.S. Government Accountability Office.
In response to last week’s announcement, President Donald Trump announced an executive order on Friday to make the federal government the largest consumer lender of student loans.
Under the order, the government will forgive up to $1 trillion in student loan debt over the course of the next decade.
Trump’s order was accompanied by a letter from Education Secretary Betsy DeVos to student loan borrowers and the Consumer Financial Protection Bureau, the agency that oversees student loan servicing.
The White House has not yet said whether Wells Fargo will offer a similar $1m cash incentive to borrowers whose loans were made after the date of the order.
The Education Department and the Federal Reserve have announced an additional $2 billion in loan forgiveness, but they do not have a date for when the federal program will be extended.