Discover Student Loans: In-Depth Review



Have you exhausted all your options with federal student aid, and still need extra help covering the costs of college? Applying for a private student loan may be your next step.
Keep in mind private student loans don’t offer many of the benefits federal student loans do. Interest rates are often higher, and repayment assistance isn’t always available. That’s why it’s recommended you fill out a FAFSA and submit it first – you’ll want to claim any grants and scholarships available to you before turning to private student loans, as grants and scholarships don’t have to be paid back.
Discover is one of many private lenders that offers undergraduate student loans, so if you need more money to cover tuition, here’s what you need to know about Discover’s offers.



In this guide, we’ll cover:
Discover’s undergraduate student loans
Discover’s graduate and professional student loans
How Discover student loans compare
The application process
Refinancing student loans with Discover
Who benefits most from a Discover student loan?
The fine print






What does Discover offer undergraduates?







Undergraduate Student Loan




Fixed APR range 6.49%-11.99%


Variable APR range 4.37%-10.37%


Loan terms offered 15 years after deferment period


Fees None


Loan amount A minimum of $1,000 up to the entire school-certified cost of attendance after financial aid. Aggregate loan limits apply.


Repayment plans You can pay a fixed monthly payment of $25 while in school or during grace period You can defer payments until 6 months after graduation, or when you’re enrolled less than half-time And you can also make additional payments while in school to reduce your costs by the time your regular monthly payments come due. Discover also offers some repayment options for borrowers experiencing financial difficulties. It recommends borrowers call the Repayment Assistance Department at 1-800-STUDENT to talk about options such as deferment, early repayment assistance program, payment extension, reduced payment, forbearance or hardship.


Cosigner release None for loans originated by Discover. Cosigner release for previous CitiAssist Loan purchased by Discover is available. You must be at least 18, a U.S. citizen or permanent resident, and meet the repayment, credit history and income requirements.


Savings opportunities Reduce your rate by 0.25% if you opt into automatic payments during repayment period. Get a one-time cash reward of 1% of your student loan amount (for loan applications submitted on or after May 1, 2014) if you maintain a 3.0 GPA or equivalent.




As of Dec. 4, 2017

Discover’s undergraduate student loan claims to be a “zero fee loan” as there are no application, origination or late fees associated with it. On top of that, you can apply to cover 100 percent of your cost of attendance (the minimum loan amount is $1,000).
Discover lists out its eligibility requirements on its website:

You need to be enrolled at least half time in a bachelor’s or associate degree program, be working toward a degree and make satisfactory academic progress, as your school defines it.
You can be a U.S. citizen, permanent resident, or international student, though international students need a cosigner who is a U.S. citizen or permanent resident.
You must be at least 16 years old to apply.
You need to pass a credit check.

If you don’t have an extensive credit history, Discover encourages you to apply with an eligible cosigner. This may increase your chances of being approved for a loan with more favorable terms and rates. Be aware there’s no cosigner release with a Discover student loan – the cosigner is on the loan for the entire duration.




What can Discover offer to graduate students?


Discover offers loans for various graduate programs with zero fees (meaning no origination, application or late fees). The company offers loans with a $1,000 minimum and a 20-year repayment period. Like the undergraduate loans, you may also be eligible for savings opportunities, as well as the ability to add a cosigner onto your loan.
All graduate and professional school loans have similar repayment plan options:

You can either make a $25 monthly payment while in school and throughout grace period, or
You can defer your payments until nine months after graduation or when you’re enrolled as a half-time student (or less).

After that, you’ll be required to make monthly payments as dictated by your loan term, amount and interest rate.
You can also make additional payments while in school to bring down your loan balance before you start making regular monthly payments. On its website, Discover says it offers help to borrowers experiencing financial difficulty. You can call the Repayment Assistance Department at 1-800-STUDENT to learn more about options such as deferment, early repayment assistance program, payment extension, reduced payment, forbearance and hardship.
All Discover student loans have the same policy on cosigner releases: There is no cosigner release option for loans originated by Discover, but cosigner release for previous CitiAssist Loans purchased by Discover is available. You may be eligible if you are at least 18, a U.S. citizen or permanent resident, and meet the repayment, credit history and income requirements.
Here are the different graduate and professional school loans available from Discover, as of Dec. 4, 2017:
Graduate loans
Discover’s graduate student loans are for those who are enrolled in a qualifying graduate program (master’s or doctorate) at least half-time and are pursuing a degree in an eligible school. You’ll need your school to prove that you’re making satisfactory academic progress. U.S. citizens, permanent residents or international students need to be a minimum of 16 years of age when applying and meet the requirements during a credit check. You can choose to apply by yourself or with a cosigner, unless you’re an international student. In that case, you’ll need a cosigner who is either a U.S. citizen or permanent resident.
Once approved, the funds will be disbursed through the school. If you can maintain a 3.0 GPA or equivalent, you’re eligible for a one-time cash reward of 1% of your loan amount. You’ll need to redeem your cash within 6 months after the academic term for your loan is finished.





Graduate Loans




Fixed APR range 6.49%-12.99%


Variable APR range 4.37%-11.62%


Loan terms offered 20 years after deferment period


Fees $0


Loan amount From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies and varies depend on the program.


Savings opportunities Opting into automatic payments gets your rate reduced by 0.25%. If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.





MBA loans
MBA loans are for students who are pursuing a degree at a qualifying business school, either for an MBA or a related graduate program. It’s the same requirements to qualify for this loan as Discover’s graduate student loan offering, and the loan amount will be disbursed through your school. You’re eligible for the one-time cash reward of you maintain a 3.0 GPA or equivalent. Check Discover’s Rewards for Good Rates page to find out your GPA eligibility.





MBA Loans




Fixed APR range 6.49%-11.99%


Variable APR range 4.37%-10.87%


Loan terms offered 20 years after deferment period


Fees $0


Loan amount From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies.


Savings opportunities Opting into automatic payments can get your rate reduced by 0.25%. If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.





Health profession loans
This type of loan is for those who are pursuing programs in allopathy, dentistry, nursing, occupational therapy, optometry, osteopathy, pharmacy, physical therapy, physician assistant, podiatry and veterinary medicine. You’ll need to be pursuing a degree in an eligible school that offers these programs.
To qualify for the health profession loan, you’ll need to meet the same requirements as the MBA or graduate loans. You may also qualify for the one-time 1% cash reward if you can maintain a 3.0 GPA or equivalent. Once approved, the funds will be distributed through to your school.





Health Profession Loans




Fixed APR range 6.49%-9.99%


Variable APR range 4.37%-8.37%


Loan terms offered 20 years after deferment period


Fees $0


Loan amount From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies.


Savings opportunities Opting into automatic payments can get your rate reduced by 0.25%. If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.





Law school loans
The law school loan is for graduate students who are currently enrolled in a qualifying law school. You’ll need to show that you’re doing well in school at be at least 16 years or older to qualify for a loan. Getting approved for a loan is the same process as the above loan types. As well, loan amounts are given to your school.





Law School Loans




Fixed APR range 6.49%-9.99%


Variable APR range 4.37%-8.37%


Loan terms offered 20 years after deferment period


Fees $0


Loan amount From $1,000 up to 100% of school-certified costs after financial aid. Aggregate loan limits as set by Discover applies.


Savings opportunities Opting into automatic payments can get your rate reduced by 0.25%. If you maintain a 3.0 GPA (or equivalent), get a 1% one-time cash reward of your loan amount.





Residency loans
Discover’s residency loans are meant to help residency candidates in medical school cover the cost of internship, residence, board exam reviews and relocation. To qualify, you’ll need to be enrolled at least half-time in a qualifying health-profession graduate program and making satisfactory progress. You may also qualify if you have recently graduated from medical school within the last 12 months. You need to pass a credit check and be a U.S. citizen or permanent resident. International students may apply but they’ll need a U.S. citizen or permanent resident cosigner.
Once your loan is approved, the money will be given to you via electronic deposit or a check. Unlike the other graduate loan programs, there is no 1% cash back reward but you can get an interest rate deduction if you enroll in auto pay.





Residency Loans




Fixed APR range 6.99%-9.49%


Variable APR range 4.87%-7.87%


Loan terms offered 20 years after deferment period


Fees $0


Loan amount $1,000-$18,000 for the allopathy, dentistry, optometry, osteopathy, pharmacy, podiatry and veterinary medicine fields $1,000-$5,000 for the nursing, occupational therapy, physical therapy and physician assistant fields. Aggregate loan limits as set by Discover applies.


Savings opportunities Opting into automatic payments may reduce your rate by 0.25%.





Bar exam loans
The bar exam loan is for students who are considered candidates for the bar exam. It’s meant to help you cover the cost of living expenses and bar exam prep class while you’re studying for the exam. To qualify, you’ll need to have graduated from law school in the last 6 months or be enrolled at least half-time in your final year in a law degree graduate program. In addition, you’ll need to be a U.S. citizen or permanent resident (international students will require a cosigner) and meet satisfactory credit requirements.
The funds for the loan will be given you via electronic transfer to your bank or a check. You can get a 0.25% rate reduction if you participate in auto pay.





Bar Exam Loans




Fixed APR range 6.99%-11.49%


Variable APR range 4.87%-9.87%


Loan terms offered 20 years after deferment period


Fees $0


Loan amount $1,000-$16,000. Aggregate loan limits as set by Discover applies.


Savings opportunities Opting in automatic payments get your rate reduced by 0.25%







How do Discover student loans compare?
Discover student loans are fairly competitive when compared to other top student loan companies. Their rates and repayments are comparable to other large financial institutions. However, Discover falls short when compared to cosigner releases, rates compared to credit unions and loan amounts.
Where Discover stands out:

No fees: There are no application, origination, or late fees, whereas some other big banks do.
Unique rewards program: Get rewarded for good grades by getting a one-time 1% cash reward for qualifying loans. Other places only offer auto-pay discounts.
Competitive rates: Discover’s fixed rates are in par or lower to its competitors.

Where Discover student loans fall short:

No cosigner release option: Only a certain type of loan purchased by Discover is eligible for cosigner release. Otherwise, you cannot release your cosigner from a Discover student loan (unless you refinance). Other banks and credit unions offer cosigner release if the borrower has met certain requirements such as a satisfactory credit history and on-time payments.
High variable rates: Discover’s variable rates are considerably higher compared to other financial institutions.
Longer terms: Competitors offer shorter terms whereas Discover’s are anywhere from 15 to 20 after the grace period has ended.



The application process
Discover says its application takes about 15 minutes to fill out online. Before applying, have the following information ready to enter:

Your school’s information
Your field of study and the academic term for which you’re applying
Social Security number
Loan amount requested
Amount of financial aid you’ve already received
If applicable, financial information such as salary and rent/mortgage payments
Your address (permanent and where you’ll reside once at school)

Discover makes the application process simple. You can select the state your school is in, and a list of schools in that state will populate. Choose your school from the list or search for it.
You’ll then be asked to enter all your personal information and any other details Discover needs.
If any additional documentation is requested, you can upload it online. By submitting your application, a hard inquiry of your credit will be conducted. The same is true if a cosigner applies with you.
Funds will be disbursed according to your school’s financial aid office deadlines.
Repayment assistance options
Discover has multiple options for you in case you experience financial hardship while paying back your loans. Federal student loans come with certain benefits such as deferment and forbearance, so you don’t need to make monthly payments during a period of financial difficulty. Private lenders aren’t required to offer these benefits, but some lenders do. Keep in mind they’re not guaranteed and can be taken away in the future.
While it may seem like paying your student loans off is years away, it helps to know what your options are as they vary among private lenders. You should take this into consideration when shopping around for private student loans.
Discover offers a range of solutions like deferment, payment extension, forbearance and reduced payments. Take a look at what each entails and what it takes to qualify here .


Refinancing student loans with Discover
Discover offers loan consolidation to help you lower your interest rate and simplify your loan payments. If you cannot get a cosigner release, refinancing your student loan allows you to do so by paying off your existing loans. You can choose to consolidate some or all of them with a minimum of $5,000 up to $150,000 upon credit approval.
Like their student loan options, there are no application, origination or early payment fees. If you are able to make additional payments, you can pay off your loan sooner and save on the cost of your loan. You can consolidate while enrolled in school, during your grace period or after it expires. Once you qualify, your first payment is due anywhere from 30-45 days after the loan is disbursed.
However, Discover’s student consolidation rates are higher compared to its competitors, even with the auto pay discount. Also, the repayment period is anywhere from 10 to 20 years depending on your creditworthiness, which is longer than other places that offers terms as short as 5 years. If you have a cosigner for your refinance loan, you cannot release them, unlike some other banks.
To qualify, you’ll need to be a U.S. citizen or permanent resident, be the primary borrower for loans you’re planning on consolidating, have a good repayment history and prove you have sufficient income to handle your payments. Discover also requires its borrowers to have no more than $150,000 in aggregate student loan debt, including federal student loans, though depending on your field of study you may be eligible for higher limits.
LEARN MORE ABOUT REFINANCING WITH DISCOVER 


Who benefits the most from a Discover student loan?
Overall, students who have applied for federal aid and have received the maximum amount they’re qualified for, but still need additional assistance to fund their college tuition, may benefit from Discover’s student loan. Its rates are somewhat comparable to federal loans as long as you or a cosigner have excellent credit, and it offers great repayment assistance options along with a few bonuses that don’t come with federal loans.
Consider all options
While Discover has a decent student loan program to offer borrowers, it’s far from the only option out there. You may be able to get better rates and terms with another private lender. It’s a good idea to shop around to see the different loans you’re eligible for. Some credit scoring models will count multiple applications for student loans as a single inquiry, as long as they’re made within a short period of time (generally between 14 and 45 days, depending on the score). By shopping around, you’ll be able to choose the best loan offer and may not see much impact on your credit score.
Also, remember to compare APRs and not just interest rates – other lenders may charge late, origination and application fees that need to be factored into the cost of the loan. Check to see what repayment options are available, and any other “bonuses” lenders may be offering.


The fine print
There really isn’t any. There are no prepayment penalties, and no origination, late or application fees associated with the loan. Still, make sure you take the time to read your loan agreement before signing it.
A word of warning on choosing a variable interest rate, though – while variable rates are lower and look more attractive, keep in mind the rate may change at any time. That means your loan may become more expensive.
No one can predict where the market will go, so rates may stay low, or they may skyrocket in the future. A fixed interest rate can provide valuable peace of mind, even if you have to pay for it.
Erin Millard contributed to this story.
This post has been updated. It was originally published Sept. 1, 2015.


The post Discover Student Loans: In-Depth Review appeared first on MagnifyMoney .

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