Last updated on September 5th, 2022 at 02:30 am
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How will you pay for college? It’s a question that comes up for many students on their way to universities across the country. In the past 30+ years, the average cost of tuition has grown over 260% along with enrollment rates increasing nationwide as well. What this means for you is that oftentimes you need to find alternative methods of funding your education including taking out student loans. Before you sign any documents, you should look at the costs of the loan such as interest rates, loan requirements, and other information. Below you’ll find a Discover Student Loan review so that you can see if it’ll fit your college funding needs.
Bonus read: How to Save Money as a College Student
Discover Student Loans Overview
Discover Student Loans are distributed from Discover Bank. Their customers consist of students in undergraduate and graduate programs and the loans are disbursed through the university. For both undergraduate and graduate loans, Discover offers variable and fixed rate student loans. You have the option of repaying the loan while in-school or you can defer payments until after graduation. Check out some basic information below in our Discover Student Loan review:
- Fixed Rates: At the time of this review, fixed rates started at 5.99% APR and up for both undergraduate and graduate loans. Fixed interest rates are set when you sign the loan application and the rate stays the same until the loan is paid off.
- Variable Rates: For Variable loan rates, the APR can be as low as 3.99% (at time of the review) and up. The variable rates are based on the 3-month London Interbank Offered Rate (LIBOR) + 1.74%. With variable rate loans, the rate can change each quarter and can cause the monthly payment amount or frequency of payments to be increased.
- Loan Terms: The repayment period for student loans is 15 years after the 6-month deferment following graduation. There are two types of repayment options while you’re in school. The Interest-Only option allows you to make monthly interest payments while attending school and the 6-month grace period. This option allows you to get a 0.35% interest rate reduction. The fixed option allows you to make $25 monthly payments to lower loan costs. You can also choose to forgo payments until 6 months after you graduate or switch to part-time attendance. Payments are made on a monthly basis, and you have the option of prepaying and making extra payments without penalty.
- Minimum Amount: Each loan has a minimum amount of $1000 per loan.
- Maximum Amount: You can take out a loan of your entire cost of school after you take into account financial aid and other options.
Discover Student Loans Requirements
The application process is fairly straightforward and is completed online through the Discover Student Loans website. If you’ve already submitted an application, you can also check the status of it from the same portal. Once submitted, you can get a credit result in about 15 minutes depending on the application. If you need assistance during the application process, you can chat with a Student Loan Specialist.
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- Credit Score: Discover uses your FICO credit score to determine the interest rates and loan eligibility for your student loan. If you don’t have enough established credit, a creditworthy co-signer will need to be added to the loan application. On average, Discover will be looking for FICO scores in the high 600s.
- Annual Income: When making a decision on your application, Discover will look at your gross annual income and that of your co-signer if needed.
- Citizenship: To be eligible for a Discover College Loan, you have to be either a US citizen or permanent resident. This is also available to international students if they have a US citizen or permanent resident as a cosigner.
- Application Fee: Currently there are no fees assessed for the loan application, origination fees, and late fees.
We Liked Discover Student Loans Because…
- 0.25% interest rate reduction during repayment when you set up automatic payments.
- A fast and simple application process for student loans.
- Cash back rewards for good grades (3.0 GPA) and graduation rewards.
- Discover Student Loan offers a high loan limit of up to $200,000 depending on your college costs.
- Consolidation options allow you to transfer over other student loans so that you can make a single payment.
- Discover Student Loans doesn’t have any fees such as application, origination, and late fees.
- Wide range of education funding available including undergraduate, graduate, MBA, Health professionals, law students, residency, and bar exam loans.
Not So Sure About…
- Most applicants will require a well-qualified co-signer to complete the application. Around 95% of Discover Student Loans reported on their annual statements had cosigners assigned to the student loan.
- Cosigners can’t be released from the student loan. Even after a student improves their credit score or acquires a higher paying job, the cosigner will still be on the student loan until it’s paid off.
- Fifteen-year repayment means that payments can be higher regardless of income levels. If you need loan repayment flexibility, another loan option may be better.
- Higher interest rates: Discover can be a good option if you have excellent credit or your co-signer does. Variable rates can reach up to 10.12% or more and Fixed rates can reach up to 12.49% or higher depending on the credit score.
Online Reviews Say That
Nerdwallet wrote up their own Discover Student Loan review and rated it with a 5.0 out of 5.0 score for the number of consumer-friendly features. The 15-year repayment term is about average when compared to other private loan options, and can be a good option if you have a good credit score or your cosigner does. This can also be a good option if you need to fill a gap in financial aid.
Discover Student Loans Contact Details
This section of our Discover Student Loan review shows you how to quickly get in touch with them.
- Customer Support: Customer service for Discover Student Loans can be done by phone, email, and fax. To contact a Student Loan Specialist 24/7 you can call 1-800-788-3368 (1-800-STUDENT) or for TDD: 1-800-223-5614.
- Email address: To send an email to customer service, you can sign into your existing account and send a secure message from there.
Discover Student Loans may be right for you if you have a good credit score or have a creditworthy cosigner available that is willing to sign on for the 15-year repayment agreement. While you can fund up to 100% of your college expenses with the private loan, both Discover and many resources recommend looking for scholarships and other financial aid options to fund the bulk of your costs. Discover Student Loans can then be used to fill the gap between costs and financial aid.
If you enjoyed this Discover Student Loan Review, or have your own student loan experiences to add, we invite you to share them along with any questions you may have and share this Discover Student Loan review with others that may find this useful.