Review: How to Help Your Child Qualify for a Discover Student Loan

discover student loans

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 review

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 and personal loans, 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.

  • Undergraduate student loans: If your kid will be going to school or is already a college student, they can borrow up to the total cost of attendance, including tuition, fees, and room and board.
  • Graduate student loans: Students pursuing a master’s or professional degree can borrow as much as they need to pay for school and education-related expenses.
  • MBA student loans: MBA students can take out loans to cover the full cost of going to business school.
  • Health profession student loans: Discover student loans can help medical, dental, or veterinary students pay for their education.
  • Law student loans: If your child dreams of becoming a lawyer but is struggling with the high cost of law school, Discover law student loans can help fill the gap.
  • Residency student loans: Through Discover, your child can borrow up to $18,000 — some fields of study have lower maximums — to pay for their residency program expenses, including relocation.
  • Bar exam student loans: Law students preparing for the bar can take out a loan for as much as $16,000 to cover the cost of preparation classes and living expenses.
  • Consolidation student loans: If your child has both federal and private loans, a consolidation loan can simplify payments by combining them into one loan. The consolidation loan minimum is $5,000.

Discover interest rates and fees

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.

discover student loans review

Image credit: Discover.com

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.

discover loans student

Image credit: Discover.com

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.

Discover customer service

Discover Student Loans is a subset of Discover Financial Services. The Better Business Bureau (BBB) ranks the company highly, assigning them an A-plus rating.

Discover’s customer service team is available via email, phone, mail, or fax. You can also follow Discover and ask questions through Twitter.

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.

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