Discover Student Loans, part of Discover Bank, may be an ideal lender for students who realize that their financial aid package did not provide them with enough funding to fully pay for college.
Whether you are an undergraduate or graduate student, continue reading to learn more about the benefits of borrowing through Discover Bank, including information about rates, reviews, and eligibility.
In this post:
- Discover student loan highlights
- What is Discover Student Loans?
- Discover Student Loans review
- The bottom line
Discover student loan highlights
- Great private student loan rates
- Rewards for good grades
- Scholarship sweepstakes
Discover offers an array of private undergraduate and graduate loans at both fixed and variable rates with no fees. Discover provides school, military, public service, and residency deferment options, as well.
|Loan amounts||Up to 100% of school-certified college costs
(aggregate loan limits apply)
|Loan terms||15 and 20 years|
|Age||Must be at least 16 years old at time of application|
|Cosigner info||Cosigner may be required for students with no or poor credit|
|Repayment||In school or deferred options|
|Benefits||One-time cash reward for each new Discover undergraduate and graduate student loan when you get at least a 3.0 GPA or equivalent
(Reward redemption period is limited.3)
|Loan servicer||Discover Bank|
What is Discover Student Loans?
When most people think of Discover, they think of the company’s banking, credit cards, and personal loan options. But Discover also offers student loans at competitive rates, called Discover Student Loans, which can be extremely helpful to borrowers who don’t receive enough funding by completing the FAFSA.
What kinds of student loans does Discover offer?
Discover offers a wide variety of student loans to both undergraduate, graduate, and professional students (business, medical, and law). The loan amount ranges from $1,000 to 100% of your school-certified cost of attendance (including tuition, housing, books, and other fees or expenses). Aggregate loan limits apply.
In addition to traditional student loans, Discover offers a number of program-specific loans. For example, medical students who are about to enter their residency may apply for a loan to cover their medical residency and relocation costs, and law students who are preparing for the bar exam may apply for a loan to cover the costs of Bar study classes and living expenses.
Discover student loan rates1:
|Variable rates from (APR)*||Fixed rates from (APR)*|
|3.47% - 11.62%||5.09% - 12.49%|
Disclaimer: Discover’s lowest rates shown are for the undergraduate loan and include a 0.25% interest rate reduction while enrolled in automatic payments.
Discover has knowledgeable, U.S.-based Student Loan Specialists ready to help customers 24/7 for the life of the loan. Borrowers can check their loan balance through an online account or over the phone. Payments can be made online, over the phone, by mail, or set up to be automatically deducted from a checking or savings account. While enrolled in automatic payments, borrowers receive a 0.25% interest rate reduction.2
Eligibility requirements for Discover Student Loans
Generally speaking, in order to qualify for a Discover student loan, you’ll need to meet these eligibility requirements:
- Be enrolled at least half-time in a Bachelor’s or Associate’s degree program at an eligible college or in a Masters and Doctoral degree program at an eligible graduate school
- Be seeking a degree
- Be making satisfactory academic progress as defined by your school
- Be a U.S. citizen, permanent resident or international student (international students require a cosigner who is a U.S. citizen or permanent resident)
- Be 16 years or older at the time you apply
- Pass a credit check
Though Discover does not list its credit requirements, most student borrowers, especially for undergraduate studies, have a limited credit history that will make it difficult to qualify for a student loan on their own.
In these instances, applying with a cosigner who has good credit can be very helpful. The better your, and your cosigner’s, credit history, the lower your interest rate will ultimately be.
How to apply for a Discover student loan
The application process itself is fairly simple and only takes about 15 minutes from start to finish. That said, you’ll need to make sure you have some information handy before you begin your application:
- Your permanent address
- Your Social Security number
- The name of the school you are applying to (or attending)
- Employment information (if applicable)
- Financial information (including any rent or mortgage payments you may have)
For borrowers who are applying with a cosigner, it doesn’t matter who begins the application. If the student has already submitted their application, the cosigner should ask the student for the Cosigner Key to complete the cosigner application. If the student has not submitted their application yet, the cosigner can start the application process as a cosigner for the student.
What repayment plans are available for Discover Student Loans?
When it comes time to repay your Discover Student Loans, it’s important to understand what options are available to you.
All of Discover’s student loan offerings come with three repayment plan options:
- Deferred repayment: No need to make monthly payments until 6 months after graduation or enrollment drops below half-time status for undergraduate, or 9 months for graduate programs. Deferred repayment is likely to result in more interest charges, and can be the most expensive repayment plan.
- In-school interest only repayment: Interest-only payments while you’re in school and during your grace period can help you avoid capitalization. You also receive an interest rate discount. This repayment plan can save you money over the life of your loan because interest charges won’t pile up while you’re still in school.
- In-school fixed: You will make fixed monthly payments of $25 a month while enrolled in school and during your grace period. This repayment plan is designed to pay down at least a portion of any accrued interest (though possibly not all), which can reduce the amount of interest that capitalizes when you enter repayment.
As is always the case with student loans, you have the right to pay down principal anytime you’re able — there are no penalties for prepayment. So borrowers who want to begin making full payments of interest and principal while they’re still in school have that option.
Unfortunately, Discover does not offer different loan terms. Undergraduate loans are 15-year loans, while graduate and professional loans are all 20-year loans.
Discover Student Loans review
There are some areas in which Discover stands out from the pack and other areas where they may fall a little short. Prospective borrowers and those looking for private student loans should be sure to consider both before submitting an application.
Reviews for Discover Student Loans are generally positive and focus on the fact that the company has great private loan rates with no application, origination, or late fees. You can read some reviews from Discover customers on their website, where the company maintains a record of 4.5 out of 5 stars.
Discover borrower benefits
- Easy application: The company says that applying for a student loan takes as little as 15 minutes.
- A U.S.-based loan specialist: All of Discover’s loan specialists are based in the United States and are available 24/7 by phone to help you navigate customer support issues.
- Zero fees: Discover does not charge loan origination, application, or late fees.
- Multiple repayment plans: Borrowers can choose from three repayment plans to select the option that works best for their own unique financial situation.
- Full tuition coverage: Borrowers can borrow a total of up to 100% the cost of attending their school, including tuition, room and board, other school-certified expenses. Aggregate loan limits apply.
- Options for undergraduate, graduate, and professional students: No matter the level of education you are looking to fund, Discover likely has options for you, including loans for those seeking professional degrees (law, medical, MBA), and loans for law and medical students looking to cover living expenses during residency or bar exam prep.
- Competitive rates: Though higher interest rates than federal student loans, Discover’s student loans carry competitive interest rates and are offered as both fixed and variable-rate loans.
- Interest rate reduction: Borrowers who sign up for autopay may qualify to reduce their interest rate by up to 0.25%, saving hundreds of dollars over the life of a loan.
- Rewards for good grades: Students with a GPA of at least a 3.0 or equivalent can receive a one-time cash reward on each new Discover undergraduate and graduate student loan.
- Helpful Tools: Discover has a wide library of helpful information and articles that borrowers can use to learn more about navigating financial aid.
- Scholarship opportunities: Borrowers can also enter to win a $5,000 scholarship through Discover to help afford college.
Consider the following before taking out a Discover student loan
- Higher interest rates compared to federal student loans: Though competitive amongst private lenders, Discover Student Loans may carry higher interest rates compared to federal student loans for some borrowers.
- Interest begins accruing immediately: Whereas subsidized federal student loans don’t begin accruing interest while a borrower is enrolled as a student, during their grace period, or during periods of qualified deferment, interest will begin accruing on student loans borrowed from Discover as soon as they are disbursed, as is common for most private student loan providers.
- Lack other benefits common to federal student loans: Federal student loans are preferable to private student loans for a number of reasons. In addition to low interest rates, federal loans offer borrowers benefits including student loan forgiveness possibilities and options for income-based repayment, which you won’t find with Discover (or most other private lenders).
- Students without a cosigner may be denied: If you’ve got a limited credit history (as is typical of most first-time borrowers) and no cosigner to help you apply, Discover may not approve you for a student loan. If you are approved, be prepared to pay a higher interest rate due to the increased risk you present to the company.
Like other lenders and loan servicers, Discover chooses to give back to students in various ways. Recently, the company launched a scholarship sweepstake that will give away $110,000 in scholarships between January 2018 and December 2018 to current, eligible high school seniors, undergraduate students, and their parents.4
Overall, Discover stands out as a student loan lender with no fees required and great interest rates that offer more rewards and discounts that many of their competitors.
The bottom line
In addition to offering competitive rates and a number of repayment plans for undergraduate, graduate, and professional students, Discover offers benefits like rewards for good grades which are unique amongst lenders.
Because each student loan lender determines the rate they’ll offer you on a case-by-case basis, it’s impossible to find your best rate without comparing multiple lenders first.
Credible makes it easy to compare top rates from multiple lenders with just one simple form. You can even check your prequalified rates without a hard credit pull (so it won’t affect your credit).
|Lender||Fixed Rates From (APR)||Variable Rates From (APR)||Get Rates Through Credible|
Citizens Bank review
College Ave review
|4.74% - 11.35%9||2.75% - 10.22%9||Get Rates
Sallie Mae review
SunTrust Bank review
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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 6Discover Disclosures | 7SunTrust Bank Disclosures | 9Sallie Mae Disclosures
Citizens Bank Student Loan Rate Disclosure
Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2019, the one-month LIBOR rate is 1.70%. Variable interest rates range from 2.73%-11.06% (2.73%-10.91% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.40%-12.19% (4.40% - 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co- signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
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1 The lowest rates shown are for the Undergraduate Loan and include a 0.25% interest rate reduction for automatic payment. Please review Terms and Conditions at www.discoverstudentloans.com/autodebitreward. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month 2.25% as of October 1, 2019. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1, and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please visit https://www.discover.com/student-loans/interest-rates.html for more information about interest rates.
2 Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Terms and conditions apply.
3 A repayment period is the period of time during which scheduled payments are required to be made to repay the principal balance and interest on a loan. For Discover Undergraduate Loans, the repayment period is 15 years. For Discover Graduate, Health Professions, Law and MBA Loans, the repayment period is 20 years.
4 View the Official Rules at: https://scholarship.collegecovered.com/rules.html.