Lender Profile: Discover Student Loans

Discover Student Loans

Lender Profile: Discover Student Loans

Published April 5, 2018

Discover Student Loans

Discover Student Loans

If you think of Discover as a credit card company and never considered them as a lender, you’re not alone. They are certainly best known for their credit products, but they have private loans available for students as well.


Find out more about Discover student loans below!


Discover Student Loan Summary

Types of Loans AvailableUndergraduate, Graduate, Specialty Schools
(Info below is Undergraduate)
Private Parent LoanNot Available
Cosigner ReleaseNone
Prequal Without CreditNo, only the full application is available
Borrowing AmountMinimum: $1,000
Maximum: Cost of Attendance
Repayment Length15 Years
Interest RatesVariable: 4.99% - 11.24%
Fixed: 6.49% - 11.99%
FeesNone for application, origination, early repayment, late payment, or returned check
Benefits1% Cashback on loan disbursement amount for 3.0 GPA
0.25% interest rate reduction with autopay
Repayment TermsOption 1:
$25 a month until six months after school is over, then regular repayment
Option 2:
Deferred until six months after school is over, interest added to principal
Hardship Options AvailableDeferment, reduced payments, and forbearance are available.

Loan Forgiveness is available in the event of the primary borrower's death or permanent disability.


Visit Discover at Credible 


About Student Loans from Discover

Discover offers a wide variety of student loans, including undergraduate, graduate, and specialty schooling. They do not advertise parent-focused loans, although their site does offer advice to parents about keeping college affordable.


When an undergraduate student borrows from Discover, they will have a repayment term of 15 years. Both fixed and variable interest rates are available.


Discover Student Loans require a minimum borrowing amount of $1000, and allows you to borrow up to 100% of your school-certified cost of attendance (including tuition, housing, books and more) minus other financial aid, if you qualify.


You can apply for a Discover student loan quickly online and sign loan documents electronically. They recommend that students without a long credit history or consistent income apply with a cosigner to increase the chances of approval.


Discover is unique in offering a 1% cashback award for good grades. If you earn at least a 3.0 GPA in any academic term covered by the loan, you gain 1% of disbursed loan amount in cash. This is a one-time reward and can only be redeemed once for each loan.



Qualifying for an Undergraduate Student Loan from Discover

Discover undergraduate student loans are credit-based, so you will need to qualify based on your credit score and income. If your student will struggle to do this, a creditworthy cosigner may be required. A cosigner can also help your student get a better interest rate even if they do qualify on their own.


In addition, Discover requires that undergraduate borrowers:

  • Be enrolled at least half-time in a Bachelor’s or Associate’s degree program at an eligible school
  • Be pursuing a degree
  • Be making satisfactory academic progress (as defined by the school)
  • Be a U.S. citizen, permanent resident, or an international student (requires a U.S. citizen or permanent resident cosigner)
  • Be at least 16 years old
  • Pass a credit check


A cosigner to a loan must be a U.S. citizen or permanent resident, 18 or older, and pass a credit check.


Discover does not offer a prequalification process that avoids a credit check. All applications are submitted through the credit bureaus right away.


Once a loan is approved, Discover will choose to disburse it by either electronically transferring it to the school, sending a check directly to the school, or by sending a check jointly to the student and the school. Any amount beyond the cost of attendance is sent back to Discover.



Interest Rates and Fees for Discover Student Loans

Variable interest rates for undergraduate loans from Discover are tied to the 3-month LIBOR rates. You’ll pay between 4.99% – 11.24% as of April 2018. The maximum interest rate for a variable interest undergraduate loan is 18%.


If your student chooses a fixed interest rate, the range is 6.49% – 11.99% as of April 2018. There are no application fees, origination fees, or repayment fees for a Discover student loan, either fixed rate or variable.


Both variable and fixed interest student loans from Discover have a 15-year repayment term, although they can be paid off early with no penalty.


You can lower your payments by getting a 0.25% interest rate reduction when you use automatic payment. Auto debit will cause payments to come directly from your bank account each month, without you having to do anything. It’s a great way to keep your loan current and save money.


Review other profiles of private loan lenders.



Repaying an Undergraduate Student Loan from Discover

Repayment terms vary from lender to lender, but the good news is that Discover does offer options.


One choice is to make payments while in school. Your student will pay $25 per month during school and during the six-month grace period after graduation. These payments will help reduce the amount owed upon graduation.


Your student is also able to defer payments while in school, with the unpaid interest being added to the balance of the loan when repayment begins. Repayment begins six months after graduation, or six months after the borrower’s enrollment falls below half-time.


There is no cosigner release available for Discover Student Loans issued after 2/1/2012.


If your student has problems repaying their student loan, Discover Student Loans has a Repayment Assistance Department that may be able to help. Options borrowers may have access to include:

  • A temporary postponement of payments
  • Reduced payments for up to six months
  • Forbearance for a few months (total maximum 12 months for the life of the loan)
  • A hardship reduction of the interest rate to lower minimum payments


All of these alternative options have eligibility requirements, so don’t wait until it’s too late. If you’re having trouble with your Discover Student Loans, let them know right away!


In addition, loan forgiveness is available in the event of the primary borrower’s death or permanent disability.


Visit Discover at Credible




Gather All Your Numbers and Compare with Our Loan Comparison Tool!

You need an apples to apples comparison looking at the total cost of each loan to make an informed decision.

To simplify the comparison part of the work, we created this spreadsheet that does the math for you. All yoo have to do is  just plug in the numbers.

Download it and compare multiply loans at once, including the Parent Plus Loan.









In this article:

Upcoming Events

Similar Articles for You

Missed FASFA Deadline? Your Guide to Keeping on Schedule


Missed FASFA Deadline? Your Guide to Keeping on Schedule

If you miss the FAFSA deadlines, you lose out on federal aid and government student loans. Once the date passes,...

Why Is My EFC so High and What Does it Mean?


Why Is My EFC so High and What Does it Mean?

You’ve filled out the FAFSA and received your EFC or tried an EFC calculator. Now you’re asking, Why is my...

What Does an EFC of 00000 Mean?


What Does an EFC of 00000 Mean?

If you’ve filled out the FAFSA and come back with an Expected Family Contribution (EFC) of 00000, you might think...

Tools & Services Recommended for You

There may come a time when you realize you can’t do it all alone. Use any of the many tools in our toolbox to assist you on the road to college.

Become a Member

At Road2College you’ll find everything you need to make the admissions and paying for college process less stressful and more transparent.


Explore College Insights™ — your source for finding affordable colleges and merit scholarships.


Get coaching on admissions and college financing.


Join Road2College where parents and experts work together to inform and inspire college-bound families.