Discover Student Loans: 2020 Review

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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.

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 wishing to get cash in return for good grades.

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

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% of the cost of attendance
Consolidation loans: Up to $150,000
Interest rates
Private loans: 1.12% to 13.74% variable APR, 4.24% to 13.74% fixed APR (lowest APRs shown are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and Auto Debit Reward)
Consolidation loans: 1.87% to 5.87% variable APR, 3.49% to 6.99% fixed APR (with autopay)
Repayment terms
Undergraduate: 15 years
Consolidation: 10 or 20 years
All other loans: 20 years
Grace period
6 to 9 months
Co-signer required?
No

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

Pros and cons of Discover student loans

Discover’s student loans can be a great option if you need more funding outside of your private 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.
  • Full coverage: Discover can cover up to 100 percent of your school-certified college costs at an eligible school.
  • 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.

Discover student loan requirements

Qualification requirements for a student loan from Discover vary by loan type.

For private student loans, you must be:

  • Enrolled at least half time and seeking a degree at an eligible school.
  • A U.S. citizen, permanent resident or international student with a co-signer.
  • 16 or older when you apply.
  • Making satisfactory academic progress, according to your school.
  • Creditworthy.

For consolidation student loans, you must:

  • Be 18 or older at the time you apply.
  • Be a U.S. citizen or permanent resident.
  • Pass a credit check.
  • Have no more than $150,000 in aggregate student loan debt.
  • Have verifiable income and be the primary borrower on the loans.

For bar exam loans, you must:

  • Have graduated from law school within the past six months or be enrolled in your final year of study in a graduate law degree program.
  • Be a U.S. citizen, permanent resident or international student with a co-signer.
  • Be 16 or older at the time you apply.
  • Pass a credit check.

For residency loans, you must:

  • Have graduated from medical school within the past 12 months or be enrolled in your final year of study in a graduate health professions program.
  • Be a U.S. citizen, permanent resident or international student with a co-signer.
  • Be 16 or older at the time you apply.
  • Pass a credit check.

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.

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 the repayment terms and grace period for Discover?

The type of loan you receive from Discover determines your repayment period and grace period. Undergraduate loans from Discover come with a repayment period of 15 years and a six-month grace period. That means that 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 six to nine months. With consolidation loans, you can select a repayment period of 10 or 20 years.

All loans except consolidation loans have a few repayment options. You could choose to defer payments while you’re in school, make interest-only payments while in school, make a fixed $25 payment each month while in school or make full monthly payments while in school.

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 could 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 fixed or variable interest rate and a repayment option.
  4. Once approved, sign and accept loan documents.

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

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 Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and Auto Debit Reward. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans. The lowest APRs shown for residency, bar exam, private consolidation and parent loans are available for the most creditworthy applicants and include a 0.25% interest rate reduction while enrolled in automatic payments. 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 October 1, 2020. 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. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.