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, no fees and a cash reward for good grades* 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 (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
Loan amounts
Private loans: $1,000 to 100% school-certified costs. Aggregate loan limits apply.
Consolidation loans: $5,000 to $150,000
Interest rates
Private loans: 1.24% to 12.99% variable APR, 4.24% to 13.99% fixed APR
Consolidation loans: 1.87% to 5.87% variable APR, 3.49% to 6.99% fixed APR
Repayment terms
Private loans: 15 or 20 years
Consolidation loans: 10 or 20 years
Grace period
6 or 9 months*
Co-signer required?
No

Lowest APRs shown for Discover undergraduate, graduate, health professions, law and MBA loans are available for the most creditworthy applicants and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. Lowest APRs shown for Discover residency, bar exam, parent and consolidation loans are available for the most creditworthy applicants and include a 0.25% interest rate reduction while enrolled in automatic payments.
*For students who defer payments while in school, the grace period ends six months after graduation or after enrollment drops below half time (nine months for graduate, health professions, law, MBA, residency and bar exam loans).

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 reward 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.

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.

Discover student loan requirements

Qualification requirements for a student loan from Discover vary by loan type, but all loans have requirements around age, credit, citizenship and more. If you don’t meet the requirements on your own, you may need a co-signer. For more information on eligibility, visit the Discover website.

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. It’s also a good choice for those interested in earning cash back rewards for maintaining good grades.

Interest rates and terms

Discover offers both variable- and fixed-rate options across its student loan products. It offers a discount of 0.35 percent if you opt to make interest-only payments during the in-school and grace periods, as well as a 0.25 percent rate reduction if you set up autopay.

Below are Discover’s interest rates. Interest-only discounts do not apply to residency, bar exam, consolidation or parent loans.

Loan product Variable rate* Fixed rate*
Undergraduate student loans 1.24% to 11.99% APR 4.24% to 12.99% APR
Graduate student loans 1.99% to 11.49% APR 4.49% to 11.99% APR
MBA student loans 2.24% to 9.99% APR 4.49% to 10.59% APR
Health professions loans 1.99% to 6.99% APR 4.49% to 7.74% APR
Law school loans 1.99% to 8.59% APR 4.49% to 8.99% APR
Bar exam loans 6.24% to 11.74% APR 6.99% to 12.49% APR
Consolidation loans 1.87% to 5.87% APR 3.49% to 6.99% APR
Parent loans 3.99% to 12.99% APR 5.49% to 13.99% APR
Residency loans 5.24% to 7.34% APR 6.24% to 7.99% APR

*Lowest APRs shown for Discover undergraduate, graduate, health professions, law and MBA loans are available for the most creditworthy applicants and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. Lowest APRs shown for Discover residency, bar exam, parent and consolidation loans are available for the most creditworthy applicants and include a 0.25% interest rate reduction while enrolled in automatic payments.

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.

What are repayment terms and grace period for Discover?

All loans except consolidation loans have a few repayment options. Students have the option to make either interest-only or $25 fixed, monthly payments while in school and during the grace period to lower the overall loan cost. However, students can also choose to defer payments, meaning that monthly payments are not required until after the grace period or enrollment drops below half time.

The type of loan you receive from Discover determines your repayment period and grace period. Undergraduate loans and parent loans from Discover come with a repayment period of 15 years and a six-month grace period. This means that for students who defer payments while in school, full monthly payments aren’t due until six months after you graduate or your enrollment status drops below half time.

All other student loans from Discover, including graduate loans, have a repayment period of 20 years and a grace period of nine months after graduation or after enrollment drops below half time. With consolidation loans, you can select a repayment period of 10 or 20 years.

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. Once 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

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.

Lowest APRs shown for Discover undergraduate, graduate, health professions, law and MBA loans are available for the most creditworthy applicants and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. Lowest APRs shown for Discover residency, bar exam, parent and consolidation loans are available for the most creditworthy applicants and include a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans. 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. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. 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. Your APR will be determined after you apply. Learn more about Discover Student Loans interest rates at DiscoverStudentLoans.com/Rates.