When it comes to your children, you want to give them the best — and that includes their education. However, college today is more expensive than ever before.
According to the National Center for Education Statistics, the cost of tuition and fees for a student going to an in-state public school in 1990 was $3,016. As of 2017, the average cost to go to a public university has jumped to $9,650.
With that high price tag, it’s no wonder that many families have to turn to student loans to pay for school. Although federal loans should be the first place you and your child look for aid, sometimes those loans don’t cover the full cost of attendance. In that situation, you might need to turn to private student loans.
One private option to consider is Discover student loans. If you’re willing to help your child with their education, you can boost their chances of getting approved for a loan and qualify for a lower interest rate to make school more affordable.
Discover student loans
As a parent, you want to make sure your child only deals with established, reputable lenders. Though Discover is well-known for its credit cards, personal loans, and banking options, it also offers a robust student loan program.
Discover loans: Student products to pay for school
Whether your child is an incoming freshman or a law student preparing for the bar exam, Discover has loan options that can work for them. Discover doesn’t charge any application, origination, or prepayment fees. Even better, they offer both fixed and variable interest rates.
Fixed-rate loans have the same interest rate and minimum payment for the length of the loan.
As of January 2018, fixed interest rates can be as low as 5.24% depending on the type of loan your child takes out.
Unlike fixed-rate loans, variable interest rates typically start out low but can fluctuate over time. Your child’s interest rate and minimum payment could increase during their repayment term. However, many people find the initial lower rate to be worth it. With Discover, they could qualify for a rate as low as 4.12%.
If your child decides to take out a Discover student loan, there are ways they can lower their interest rate even further. The company offers a 0.25 percent interest rate discount if they sign up for automatic payments.
As an added bonus, Discover offers some perks to help your child through school and after graduation. If your kid maintains at least a 3.0 GPA, they can receive 1 percent cash back on a new Discover student loan.
When they graduate, they can get 2 percent of their loan balance as a reward. They can use that money as a statement credit or receive it as cash in their bank account.
Using Discover’s parent site
Although Discover often allows students to borrow enough money to cover 100 percent of their tuition and housing expenses, that doesn’t mean your child should rely solely on private student loans to cover college costs. There might be cheaper options available to them.
To help educate families about all of their financing options, including federal student loans, Discover launched a parent-specific portal with advice on how to navigate paying for school.
You don’t need to create an account to access the parent site. It’s a free resource you can access anytime.
How to help your child qualify for lower interest rates
Although students can apply for Discover student loans on their own, they might struggle to get approved. Even if they can qualify for a loan by themselves, they might not be eligible for a low interest rate.
You can improve your child’s chances of receiving a loan and qualifying for a competitive interest rate by acting as a cosigner.
A cosigner is someone with a strong credit history and income that guarantees the loan, meaning that if your child falls behind on payments, you’ll be responsible for them instead. Because a cosigner lowers the bank’s risk, the lender is more likely to offer a low-interest loan to your kid.
Unlike some other lenders, Discover doesn’t offer cosigner release, meaning there is no way to remove yourself from the loan later on. You’ll be responsible for the loan — and it will show up on your credit report — until it’s paid in full.
Acting as a cosigner is a big decision, so make sure you understand the ways it can affect you before putting your name on the application.
Applying for a loan through the Discover online platform
If you plan on acting as a cosigner on your child’s loan, they can complete the application on their own first or you can start a cosigner application. If the student fills it out first, Discover will send them a cosigner key code, which you will use to start a cosigner application.
To complete the application, you will need your Social Security number, employer information, financial information — including rent or mortgage payments — and your permanent address handy. The site will prompt you to enter your information, and you can receive a credit result in as little as 15 minutes.
Eligibility requirements for Discover student loans
There are set qualifications students must meet to receive a Discover loan, which you can learn about in this Discover student loans review.
If you’re a parent who wants to cosign a loan to help your child, you must be a U.S. citizen or permanent resident. Although Discover doesn’t list the minimum credit score or income it requires for cosigners on its website, cosigners will likely need good to excellent credit and enough income to afford the monthly payments if needed.
Compare private lenders
Discover student loans have some appealing perks, such as the GPA reward and graduation cash-back bonus, but you and your child shouldn’t base your decision on those factors alone. The lack of a cosigner release can affect you later on, and it’s wise to compare offers from multiple student loan lenders to ensure your child gets the best offer.
Need a student loan?Here are our top student loan lenders of 2018!
1 = Citizens Disclaimer.
2 = CollegeAve Autopay Disclaimer: 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.
* 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.
|3.54% – 12.07%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.95% – 12.10%||Undergraduate and Graduate||Visit Ascent|
|4.00% – 11.85%*3||Undergraduate and Graduate||Visit SallieMae|
|3.94% – 12.19%1||Undergraduate, Graduate, and Parents||Visit Citizens|
|4.63% – 9.71%||Undergraduate and Graduate||Visit LendKey|
|3.21% – 10.55%||Undergraduate, Graduate, and Parents||Visit CommonBond|