Discover Student Loans: 2021 Review

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Please Note: Information about Discover Student Loans has been collected independently by Bankrate.com. The issuer did not provide the details, nor is it responsible for their accuracy.

In addition to its well-known credit card products, Discover offers a range of competitive private student loan options. Low rates and no fees make Discover’s student loans worth consideration.

Discover is best for high-performing students or those looking to fund multiple years of school.

Discover features

Discover is an online lender that offers private student loans and loan consolidation to borrowers throughout the nation. It covers up to 100 percent of school-certified college and graduate school costs minus other financial aid (aggregate loan limits apply).

One standout feature of this lender is that it offers a cash reward for borrowers who get a 3.0 GPA (or equivalent) in any academic period covered by their loan. That’s a bonus for any student looking to get rewarded for performing well in school.*

Discover offers undergraduate, graduate, MBA, health professions, residency, law, bar exam, consolidation and parent loans.

*Get a cash reward on each new Discover undergraduate and graduate student loan when you earn at least a 3.0 GPA (or equivalent) in any academic period covered by the loan. Limitations Apply. Visit DiscoverStudentLoans.com/Reward for terms and conditions.

Discover student loan snapshot

Loan types
Undergraduate, graduate, MBA, health professions, residency, law, bar exam, consolidation, parent
Interest rates
See rates at DiscoverStudentLoans.com/Rates
Repayment terms
Private loans: 15 or 20 years
Consolidation loans: 10 or 20 years
Grace period
Undergraduate loans: (6 months) For students who defer payments while in school, the grace period ends 6 months after graduation or after enrollment drops below half-time.
Graduate/Health Professions/Law/MBA/Residency/Bar Exam loans: (9 months) For students who defer payments while in school, the grace period ends 9 months after graduation or after enrollment drops below half-time.
Co-signer required?
No

Pros and cons of Discover student loans

Discover’s student loans can be a great option if you need more funding outside of your federal student loans. However, there are downsides as well. Here are some pros and cons you should consider before applying.

Pros

  • No fees: Discover doesn’t charge application, origination or late fees.
  • Rewards: You could qualify for a one-time cash reward1 of 1 percent on each new loan you take out if you get at least a 3.0 GPA in college or graduate school. You may also qualify for an additional reward on your first loan if you’re an incoming freshman and your high school GPA is at least 3.0.
  • Multiyear option: With Discover, you can get prequalified for future academic periods, meaning you can apply for future student loans without impacting your credit.

1Get a cash reward on each new Discover undergraduate and graduate student loan when you earn at least a 3.0 GPA (or equivalent) in any academic period covered by the loan. Undergraduate freshman students may also qualify for an additional cash reward with their first Discover student loan if they earned a high school GPA of 3.0 or higher. Limitations Apply. Visit DiscoverStudentLoans.com/Reward for terms and conditions.

Cons

  • No prequalification: Discover doesn’t offer prequalification, so make sure you check the loan requirements before applying; applying for a loan with the company will temporarily ding your credit score.
  • No co-signer release: Unlike many other student loan lenders, Discover doesn’t offer co-signer release. This means that your co-signer must remain partly responsible for the loan for its duration.
  • Limited loan terms: Each loan type except consolidation loans has only one repayment period to choose from. Undergraduates must repay their loan in 15 years, while graduates must repay their loan in 20 years.

Who is this loan good for?

Discover student loans are a solid option for those who have maximized grants, scholarships and other free financial aid and want a lender that offers a number of loan types and a loan consolidation option.

Interest rates and terms

Discover offers both variable- and fixed-rate options across its student loan products.

Fees and penalties

One major upside to getting a loan through Discover is that it charges no fees. There’s no loan application fee, origination fee or late fee. It also doesn’t charge a prepayment penalty.

Customer service

Discover gets an “A+” rating from the Better Business Bureau, the highest rating possible. The rating takes into account complaint history and whether the business has appropriately responded to complaints, made a good faith effort to resolve them and resolved them in a timely manner.

Discover’s customer service department is available via phone, email, fax or mail.

Student loan specialists are available by phone 24/7 at 1-800-STUDENT, or you can log in to the website and send a secure message with questions about your account or application.

How to apply for a loan with Discover

You can start the application process for a Discover student loan online, with a result in as little as 15 minutes.

Before getting started, students will need their Social Security number, school information (including field of study and period of enrollment), desired loan amount, any expected financial aid, financial information and address.

Co-signers will need to supply their Social Security number, requested loan amount, employment information, financial information and permanent address.

Here are four main steps to apply for a loan through Discover:

  1. Start the online application process.
  2. Include a co-signer, if desired.
  3. Choose either a fixed or variable interest rate and a repayment option.
  4. If approved, sign and accept loan documents.

What to do if your application gets turned down

If you’re rejected for a student loan from Discover, first contact the lender to get clarification. It’s important to know the reason you were turned down, which can be helpful when applying to other lenders. It’s also possible that there was a processing error with your loan.

Remember that there are plenty of lenders willing to compete for your business. Lenders like Sallie Mae, LendKey and Citizens Bank all offer competitive rates on undergraduate and graduate student loans.

Make sure to shop around thoroughly and find the best student loan for your needs before settling on a lender.

How Bankrate rates Discover

Overall Score 4.7
Repayment Options 4.4
Affordability 4.8
Customer Experience 5.0
Written by
Hanneh Bareham
Student loans reporter
Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand.