For many students, federal student loans and other student aid won’t cover the full cost of attending college. That’s why many people work with private student loan lenders to help cover additional costs.
Discover student loans not only offer competitive interest rates and no fees, but they also offer something no other student loan company does: a cash reward worth 1% on each new Discover student loan if you maintain a 3.0 grade point average (GPA) or the equivalent.
Keep reading to learn whether Discover student loan perks are right for you.
Discover student loan review
Before we dig into the details, here are the main benefits and drawbacks of getting a Discover student loan:
|Has competitive interest rates||Doesn’t offer income-based repayment or student loan forgiveness|
|Charges no fees whatsoever||Doesn’t offer pre-qualification|
|Offers cash back for good grades||Doesn’t offer cosigner release on new loans|
Discover student loan options
Discover offers the following student loans to current and prospective students as well as existing student loan borrowers:
- Undergraduate loans
- Graduate loans
- MBA loans
- Health professions loans
- Law loans
- Residency loans
- Bar exam loans
- Consolidation loans
With most Discover student loans, you can borrow up to 100% of the school-certified cost of attendance. Here are some exceptions:
- You can borrow up to either $5,000 or $18,000 with a residency loan, depending on your area of focus.
- You can borrow up to $16,000 for bar exam preparation, with a minimum of $1,000 per loan.
- You can borrow between $5,000 and $150,000 with a consolidation loan (higher limits might apply for certain fields of study).
Keep in mind that you might not get the full amount, however, if your aggregate loan balance exceeds a certain limit.
For all loans except consolidation loans, you have two repayment options:
- In-school: You pay at least $25 per month while you’re in school.
- Deferred: You make no payment while you’re in school. Your grace period ends six months after you graduate or your enrollment drops before half time for undergraduate student loans, and nine months for graduate student loans.
With a consolidation loan, your first payment is due within 30 to 45 days after the loan is disbursed.
Most loans have a 20-year repayment period. The only exceptions are undergraduate loans with a 15-year period and consolidation loans with 10-year and 20-year periods.
Using the Discover student loans online platform
To apply for Discover student loans, you’ll start by entering your state, your school, and the type of loan you want.
From there, you’ll share information about yourself, including your:
- Full name
- Email address
- Phone number
- Date of birth
- Citizenship status
- Social Security number
- Employment and income information
- Anticipated degree information
- Loan information
According to Discover’s website, the full process to apply takes just 15 minutes. You might need to share some documents to support your income and residence information.
If approved, you can manage your account online through Discover’s website.
Discover student loans interest rates and fees
Before you choose a student loan, it’s best to compare interest rates and fees to make sure you’re getting the best deal.
Here’s the good news: Discover doesn’t charge any fees whatsoever — not even late fees.
The bank’s interest rates, which can be fixed or variable, are also reasonable. You’ll even get a 0.25% interest rate reduction if you choose autopay for your monthly payments.
Here’s how interest rates for each loan type break down, as of March 2018:
|Loan Type||Variable Interest Rates||Fixed Interest Rates|
|Undergraduate loans||4.62% to 10.62% APR||6.49% to 11.99% APR|
|Graduate loans||4.62% to 11.87% APR||6.49% to 12.99% APR|
|MBA loans||4.62% to 11.12% APR||6.49% to 11.99% APR|
|Health professions loans||4.62% to 8.62% APR||6.49% to 9.99% APR|
|Law loans||4.62% to 8.62% APR||6.49% to 9.99% APR|
|Residency loans||5.12% to 8.12% APR||6.99% to 9.49% APR|
|Bar exam loans||5.12% to 10.12% APR||6.99% to 11.49% APR|
|Consolidation loans||4.12% to 7.37% APR||5.24% to 8.24% APR|
Although it’s easy to focus on the interest rates and fees, there are other features to consider that Discover student loans offer — and some they don’t.
Discover is a good choice if you’re a stellar student. As long as you maintain at least a 3.0 GPA (or equivalent) while you’re in school, you’ll get a 1% cash reward on each new student loan you take out through the lender.
So, if you apply for a $10,000 loan for the new school year, you’ll get $100 back to use however you want.
This perk is available for the following loans:
- Undergraduate loans
- Graduate loans
- MBA loans
- Health professions loans
- Law loans
You can apply to redeem the reward within six months after the academic term covered by the loan has ended or six months after the final disbursement is made on the loan, whichever is later.
This is one major feature the Discover student loan program is missing. A cosigner release allows cosigners to be removed from the loan after a period of on-time payments and a re-evaluation of the primary borrower’s creditworthiness.
Without that feature, cosigners are stuck with the loan on their credit report until it’s paid off or the borrower refinances with another lender.
Some student loan companies, such as SoFi and Earnest, allow you to see interest rate offers with a soft credit check before you officially apply, which gives you an idea of which lender might offer the best deal.
However, you have to apply with a hard credit check to see what Discover can offer you. Hard credit checks can ding your credit score, so it’s wise to keep them to a minimum.
Discover student loans eligibility requirements
For all Discover student loans, you must be at least 16 years old to apply and pass a credit check. For the consolidation loan, however, you have to be at least 18.
International students are welcome to apply for Discover student loans, but they need a creditworthy cosigner who is a U.S. citizen or permanent resident to get approved.
If you’re applying for an in-school loan, you need to be seeking a degree and making satisfactory academic progress, which is determined by your school. You also need to be enrolled at least half time.
To be eligible for a residency loan, you must’ve graduated from medical school in the past 12 months or be enrolled and making satisfactory academic progress in your final year of study in a graduate health professions program.
For a bar exam loan, you must’ve graduated from law school within the past six months or be enrolled and making satisfactory academic progress in your final year of study in a graduate law degree program.
Discover student loans customer service
Discover prides itself on its U.S.-based customer service team. You can reach a student loan specialist by calling 1-800-STUDENT anytime.
Discover student loan review: Is it right for you?
The Discover student loans cash reward perk is nice, but you shouldn’t let it drive your decision. If you can score a lower interest rate somewhere else, you’ll likely save more on interest over the life of the loan than you’d get from the cash bonus.
Discover’s lack of a cosigner release policy and pre-qualification process also makes it more restrictive than some other lenders. Your best bet is to shop around and compare several student loan lenders to see what they have to offer.
The more time you spend doing the research, the more likely it is that you’ll find the best deal for you.
Need a student loan?Here are our top student loan lenders of 2019!
|2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 5/22/2019. Variable interest rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Discover.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.99% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.50% – 11.35%*,3||Undergraduate and Graduate|
|4.84% – 13.49%4||Undergraduate and Graduate|
|4.25% – 11.30%5||Undergraduate and Graduate|
|4.50% – 9.47%6||Undergraduate and Graduate|
|3.74% – 9.72%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.32%8||Undergraduate, Graduate, and Parents|