Get cash back for good grades with this private student loan provider.
Discover credit cards are a household name, but did you know it also offers student loans? It can cover anything from your undergraduate degree to the cost of a bar exam prep course. Discover is one of the only student loan providers that offers a reward for students who maintain good grades.
It also offers in-school deferment options and autopay discounts similar to what you’d find with federal loans. Read on to find out if Discover is a good fit for you.
| Product Name | Discover Student Loans |
|---|---|
| Minimum Loan Amount | $1,000 |
| Maximum Loan Amount | Up to 100% of the cost of attendance |
| APR | 5.49% to 12.99% |
| Interest Rate Type | Fixed |
| Maximum Loan Term | 20 years |
| Requirements | Must be enrolled at least half-time at an eligible school with satisfactory academic progress and seeking a degree. Must be a US citizen, permanent resident or international student. |
- Age 18 years or older (16 with a cosigner)
- US citizen, permanent resident or international student
- Enrolled at least half-time at an eligible school
- Satisfactory academic progress
- Seeking a degree
First, am I eligible?
Discover offers seven different types of student loans, but most require you to meet the following requirements to qualify.
- Be a US citizen, permanent resident or international student. International students need a cosigner who is a US citizen or permanent resident to qualify.
- Be at least 18 years old. Borrowers need to be at least 18 years old — or 16 years old with a cosigner — to be eligible for a Discover student loan.
- Make satisfactory academic progress as defined by your school. This typically means maintaining a GPA of 2.0 or higher and passing enough classes to finish your degree within a few years of your original anticipated graduation date.
- Pass a credit check. Discover doesn’t have any hard credit or income limits, but it considers factors like your credit score, debt-to-income ratio and financial history.
Can my parents help me qualify?
They can. In fact, Discover has a website just for parents of student borrowers designed to educate families on how to pay for school without borrowing more than necessary. It offers tips on understanding financial aid packages, saving to pay for school, tax benefits and more. It also provides calculators to help you and your family predict how much you’ll need to pay when you start repaying your student loans.
The most effective way your parents can help you qualify, however, is by cosigning your student loan. Most college students haven’t established a credit rating and can’t pass a credit check on their own. Having your parent cosign can also help you beat the age requirement if you’re 16 or 17 years old.
Even if you have a credit rating, you still might want to consider having your parents cosign your student loans. That’s because they can help you get lower rates if they have strong credit and a low debt-to-income ratio.
What types of student loans does Discover offer?
Discover is a direct lender that offers seven different types of student loans:
- Undergraduate student loans
- Graduate student loans
- MBA student loans
- Health professions loans
- Law school loans
- Medical residency and relocation loans
- Bar exam loans
The application takes around 15 minutes to complete and can be done entirely online. If you have any trouble, Discover has US-based student loan specialists ready to help 24/7.
You can also apply to consolidate or refinance your student loans through Discover.
How much can I borrow with a Discover student loan?
Discover student loan rates, terms and loan amounts vary depending on what type of loan you’re applying for. A constant: Discover doesn’t charge application, origination or late fees. It also caps all variable rates at 20% APR. Here’s how the student loans break down.
| Student loan | Maximum loan term | Loan amounts |
|---|---|---|
| Undergraduate | 15 years | Up to 100% of your school-certified costs |
| Graduate | 20 years | Up to 100% of your school-certified costs |
| Health professions | 20 years | Up to 100% of your school-certified costs |
| MBA | 20 years | Up to 100% of your school-certified costs |
| Law school | 20 years | Up to 100% of your school-certified costs |
| Bar exam | 20 years | Up to $16,000 for bar exam preparation costs |
| Medical residency and relocation | 20 years | Up to $18,000 for residencies in allopathy, osteopathy, dentistry, optometry, podiatry, pharmacy and veterinary medicine. Up to $5,000 for residencies in nursing, occupational or physical therapy and physician assistants. |
Does Discover offer discounts?
Yes, it does. Discover offers a 0.25% discount on interest to borrowers who sign up for autopay.
On top of this, it gives a 1% cash reward to students who maintain a 3.0 GPA while they’re using a Discover student loan to pay for school. You’ll first need to have an undergraduate, graduate, law, health professions or MBA loan to qualify. To get your cash, log in to your Discover account and submit your application within six months after the eligible semester ended.
Keep in mind that you can only redeem this reward once and it’s considered taxable income — so don’t spend it all at once.
What are my repayment options?
Discover student loans come with the same fixed repayments of any other personal loans. However, you have two options while you’re still in school:
- Deferment. Hold off on making student loan repayments until your grace period ends. Grace periods last six months after undergraduate students drop below half-time and nine months after all other types of students drop below half-time.
- In-school repayment. Make minimal payments of at least $25 while you’re in school and until your grace period is up.
Choosing deferment might seem like a no-brainer, but it can actually cost you more in the long-run. That’s because interest starts to add up once your funds are disbursed to the school. When you start making full repayments after your grace period, Discover capitalizes your interest — or adds interest to your loan’s principal. So not only will you pay more due to the interest that added up while you deferred your loans, you’ll also have interest adding up on a larger loan principal.
Payment assistance
Making full student loan repayments while you’re just starting your career can be tough. If you’re struggling to make your repayments, Discover has several options to help you avoid defaulting on your loan.
| Payment assistance | How it works | You can qualify if you’re |
|---|---|---|
| Deferment | Put your student loan repayments on hold for a period of time. |
|
| Early repayment assistance program | Put off your student loan repayments for an additional three months at the beginning of your full repayment period | Within the first three months of your repayment period |
| Payment extension | Make three months of repayments at any time within a 90-day period | At least six months into repayments with loans that are more than 60 days delinquent and haven’t been in forbearance in the last six months |
| Reduced payment | Make a reduced monthly repayment of at least $50 for the first six months of your student loan repayments | Paying off student loans that are less than 60 days delinquent |
| Forbearance | Put off your repayments for a total of 12 months during the life of your loan; you can’t take all 12 months at once | Experiencing financial hardship due to:
|
| Hardship | Reduce your interest rate for up to 12 months and make minimum monthly payments of at least $50 | Experiencing extreme economic hardship or are trying to pay off a high student debt |
To learn more about your repayment assistance options, reach out to Discover’s repayment assistance team by calling 800-788-3368.
Compare private student loans from top providers
Top reasons to consider Discover student loans
- Pays for good grades. Discover is the only lender that will give you a cash reward if you’re a good student.
- No fees. Discover doesn’t charge application, origination, prepayment or even late fees on its student loans.
- Lots of payment assistance options. Discover offers six different options to help you when you’re struggling with repayments — especially while starting your career.
- Quick application. Discover advertises that its application takes no more than 15 minutes to complete online.
- Post-graduate loans. Discover offers financing for education-related costs like bar exam preparation or relocating for a medical residency, two situations that federal loans don’t cover.
- 24/7 US-based assistance. Discover’s customer service is open at all hours to help you with any problems you might come across in the application.
Why you might want to look elsewhere
- No cosigner release. If you want to take your cosigner’s name off of your application down the road, you’ll have to apply to refinance your student loan in your name.
- Fixed repayments. Some students simply aren’t going to be able to afford making full repayments, even after applying for different payment assistance options. If you think you might struggle with full repayments, consider applying for a private student loan that offers income-based or graduated repayment options.
- You might need a cosigner to get competitive rates. As is true with most personal loans, you’ll need a cosigner with excellent credit to get the most competitive rates through Discover.
What do customers say about Discover?
Customers have had mixed experiences with Discover, though most online comments aren’t related to its student loans. It gets an A+ rating from the Better Business Bureau (BBB) based on factors like transparency and advertising practices. However, as of this writing, 88% of its 50 customer reviews on the BBB website are negative. It also has a whopping 867 customer complaints filed with the BBB.
It has similarly mixed reviews on Trustpilot, which gives it an 8.3 out of 10 — based on 10 customer reviews. Only 50% of customers rated it as excellent. Customers were most pleased with Discover’s rewards program and customer service — though many negative reviews focused on customer service.
A few other customers on online forums note that they were only able to get approved for a Discover student loan if they applied with a cosigner and didn’t recommend it for students who want to borrow on their own.
What to expect when signing up
Discover’s online application only takes a few minutes to fill out online. Here’s how to apply.
- Go to Discover’s website and click on Student Loans in the navigation bar.
- Once you’re on the student loans page, hit the orange Apply Now button.
- Select Student and click Start to begin a new application.
- Follow the directions to fill in the required fields and read the terms and conditions before submitting it. At this point, Discover conducts a hard credit check that will affect your credit score.
- Wait for Discover to give you a response. It either offers you rates for a loan on your own, with a cosigner or denies your application. Skip to number seven if you decide to take out the loan on your own.
- Have your cosigner add to your application by either calling Discover’s student loans line or filling out an online application by entering the cosigner key, a code that Discover provides you with after you submit your online application.
- Read your promissory note carefully before signing and submitting it.
After you submit your promissory note, Discover reaches out to your school to get your loan certified. For most student loans, Discover sends your school the funds no more than a few weeks before the semester starts. You can access any leftover funds after your tuition and fees are paid off by reaching out to your school’s Financial Aid department.
If you’re taking out a bar or medical residency loan, Discover sends the money directly to your personal bank account.
Step-by-step application with screenshots
More about Discover
While Discover is best known for its credit cards, it’s grown to be one of the top student loan providers in the US. Students might also be interested in checking out its student credit cards, which come with cash-back bonuses as high as 5% when you shop at select stores, gas stations, restaurants and more. You can also get $20 cash back for each academic year you maintain a 3.0 GPA for up to five years.
Read our review of the Discover it® Student Cash Back
Bottom line
Discover student loans could be a great option for students who’ve maxed out their federal student loans or need funding to help them pay for post-graduate programs. Its rewards program for good grades is a major draw for borrowers, but you might want to stay for the relatively flexible repayment options. You’ll likely need to apply with a cosigner to get a competitive rate, however, and be prepared to start making full repayments eventually.
You can learn more about how student loans work and compare private lenders by checking out our student loans guide.
