Discover is popularly known as one of the primary credit card users in the United States, it also offers other products and services such as student loans. In this Discover student loans review, we are going to share with you all the basics that you need to know to be guided accordingly.
In a recent article published by Forbes, it says that student loan debt in the country is now about $1.56 trillion. Furthermore, in the same article, it says that “the latest student loan debt statistics for 2020 show how serious the student loan debt crisis has become for borrowers across all demographics and age groups.”
There are about 45 million borrowers who collectively owe this amount in student loan debt in the country. With this number, it is not surprising that student loan debt is not the country’s second-highest consumer debt category.
Meanwhile, in another article, which was published by Pew Research Center, they provided five facts about student loans in the U.S. This was based on the research center’s analysis of a recently released data from the 2018 Survey of Household Economics and Decisionmaking by the Federal Reserve Board.
These facts include (written as it is):
- About one-third of adults under age 30 have student loan debt.
- In 2016, the amount students’ owed varied widely, especially by degree attained.
- Young college graduates with student loans are more likely than those without loans to report struggling financially.
- Young college graduates with student loans are more likely to live in a higher-income family than those without a bachelor’s degree.
- Compared with young adults who don’t have student debt, student loan holders are less upbeat about the value of their degree.
The data we presented above data only show that student loans continue to grow over the years. That, there are people who find it essential especially those aiming to finish school and earn a degree.
Although some find it financially struggling to have a student loan, they still choose to go with it anyway.
So, what’s the point of sharing all these?
Well, we just wanted to show you that if you are thinking of whether to get a student loan, know that you are not alone. A lot of people are in there or have gone there.
But apart from that, we wanted to point out that student loans should not be a pain in the ass — for anyone. It is possible to borrow money, and pay it off eventually without having to sacrifice a lot.
One way to do that is by finding the right financial student institution that offers student loans – one of them is Discover.
As mentioned earlier, we are going to do a Discover student loans review. We aim to help you understand better what the company is all about, and what it offers. More so, what sets it apart from other student loan providers in the market today.
In particular, we are going to talk about the following:
- What is Discover?
- What are the loans available?
- Who is eligible to apply for a Discover student loan?
- How to apply for a Discover student loan?
- What are the fees and charges?
- Does Discover offer any rewards and discounts?
- Is repaying a Discover student loan available?
- What are the pros and cons of Discover student loans?
But before we move on to our Discover student loans review, here’s a very informative primer about how student loans work. This one’s from How to Adult.
WHAT IS DISCOVER?
On their website, it says that the company “strives to be the leading digital bank and payments services company.” Furthermore, its mission is “to help people spend smarter, manage debt better, and save more to achieve a brighter financial future.“
As we have mentioned earlier, Discover is popular for its credit card business. However, in 2007, the company officially launched its Discover Student Loans.
The company offers a wide range of financial products, which include private student loans for undergraduate, graduate, MBA, health profession, law, residency, as well as bar exam students.
Depending on your program, Discover allows you to borrow up to the total cost of attendance. That said, Discover makes an ideal lending company of choice for those who need money to be able to finish their degree.
More so, Discover is also known for offering forbearance options, which is very rare among private lenders. They also provide rewards for those with good grades, as well as those graduating from specific programs.
WHAT ARE THE LOANS AVAILABLE?
Earlier, we mentioned that Discover offers a wide range of student loan products, which include the following:
- Undergraduate Student Loans
- Graduate Student Loans
- MBA Loans
- Health Professions Loans
- Law School Loans
- Residency Loans
- Bar Exam Loans
Here’s a quick overview about these loan types:
|LOAN TYPE||VARIABLE RATES||FIXED RATES||LOAN AMOUNTS||LOAN TERMS|
|Undergraduate Student Loans||2.80% – 11.37%||4.74% – 12.49%||$1,000 up to the total cost of attendance||15 years|
|Graduate Student Loans||3.74% – 11.37%||4.99% – 12.24%||$1,000 up to the total cost of attendance||20 years|
|MBA Loans||3.74% – 11.24%||4.99% – 11.49%||$1,000 up to the total cost of attendance||20 years|
|Health Professions Loans||3.74% – 9.37%||4.99% – 9.74%||$1,000 up to the total cost of attendance||20 years|
|Law School Loans||3.74% – 9.37%||4.99% – 10.24%||$1,000 up to the total cost of attendance||20 years|
|Residency Loans||5.97% – 8.37%||7.34% – 9.74%||$1,000 up to $18,000 (Allopathy, Dentistry, Optometry, Osteopathy, Pharmacy, Podiatry, Veterinary Medicine); $1,000 to $5,000 (Nursing, Occupational Therapy, Physical Therapy, Physician Assistant)||20 years|
|Bar Exam Loans||6.37% – 11.37%||7.74% – 12.74%||$1,000 up to $16,000||20 years|
Now, as part of our Discover student loans review, we’ll walk you through each of these products.
Undergraduate Student Loans
This refers to the student loan type that Discover offers particularly to undergraduate students who need financing to pay for school. Qualified students can borrow up to the total cost of attendance. In addition, they may also pre-qualify for loans in the future that comes with a multi-year approval.
Discover’s undergraduate student loans do not have an application, origination, and late fees, as well as prepayment penalties, should the borrower decides to pay off the loan early.
Graduate Student Loans
This type of loan is applicable to those who are pursuing a master’s or doctoral degree. Just like the undergraduate loan, you also do not have to worry about the application, origination, or late fees, as well as prepayment penalties.
Are you planning to pursue an MBA? Well, you may do so. Discover’s MBA loans are zero-fee. In addition to that, you can also apply online, and borrow up to the total cost of attendance.
Health Professions Loans
This loan is applicable for graduate students in health-related degrees like nursing, occupational therapy, optometry, allopath, dentistry, osteopathy, pharmacy, physical therapy, podiatry, veterinary medicine, and physician assistant. Just like the previous ones, Discover does not charge application, origination, or late fees, and prepayment penalties.
Law School Loans
If you are a graduate student in law school who is in need of money to pay for school, worry no more because Discover offers law school loans. This no-fee loan lets you borrow up to the total cost of attendance. More so, you may also choose an interest rate type as well as a repayment option.
Residency candidates in medical school can take advantage of this particular type of loan. These loans cover the cost of your residency, relocation costs, as well as your internship, and board exam review. The maximum amount of loans allowed depends on the field of study. As with loan terms, it is set at 20 years.
Bar Exam Loans
Bar takers may use this loan to cover the cost of bar study prep classes, as well as living expenses. The maximum loan amount for this particular student loan type is $16,000. Just the same, no application, origination, or late payment fees to worry about.
As you can see, Discover almost cover all types of student loans. From undergrad to further studies and specialties. It is safe to say that they have a loan product for every student type.
WHO IS ELIGIBLE TO APPLY FOR A DISCOVER STUDENT LOAN?
As part of our Discover student loans review, let’s proceed now to who is eligible to apply for the company’s student loans.
Basically, to qualify for a Discover student loan, the borrower has to meet the following requirements:
- Must be at least 16 years old at the time of application of the loan
- Must be a U.S. citizen, permanent resident, or eligible international student with a qualifying co-signer
- Must be enrolled at least half-time in a bachelor’s or associate’s degree program (or other eligible programs if pursuing a graduate, MBA, law, or health professions degree) at an eligible school
- Must have the intention to get a degree
- Must make satisfactory academic progress as defined by your college
- Must pass a credit check
In addition, you must prepare the following:
- Your Social Security number
- Selected school information, including the field of study
- Loan amount requested
- Expected financial aid
- Financial information, including rent or mortgage payments and income
- Permanent address and in-school address (if applicable)
Also, it is important to note that if you have a co-signer, you both need to fill out a separate application.
Now, if you think you pass all the aforementioned criteria and you have all the documents required, then all you have to do now is proceed with your application for a student loan.
HOW TO APPLY FOR A DISCOVER STUDENT LOAN?
Now, you already know the different student loan types offered by Discover. In addition, you also know already who’s eligible or qualified to apply for each of the loan types.
Given the fact that you qualify, how then do you get a student loan from Discover?
Basically, Discover accepts student loan applications from international students with a qualifying co-signer.
As mentioned earlier, students as young as 16 years old can apply for the loan, while for refinancing, the minimum age required is 18 years old.
Application of any of the aforementioned Discover student loans may be done on their website. All you got to do is click “Apply Now” on the page of the student loan of your choice.
WHAT ARE THE FEES AND CHARGES?
Of course, this Discover student loans review will not be complete if we will tackle the fees and charges that apply to the student loans. As a borrower, it is important to be well-aware of the fees and charges before you even submit a loan application.
This helps you assess whether the loan is perfect for you or you need to find a better option.
Anyway, unlike some student loan providers, Discover does not charge for anything at all.
Yes, you read it right. No charges apply.
Discover will not charge any application, origination, or late fees. In addition to that, the company also does not charge a prepayment penalty, which makes it ideal especially to those who plan to pay off the loan earlier.
To be honest, this is probably one of the best things about Discover student loans. Probably the very reason why people are drawn to apply for a student loan at Discover.
DOES DISCOVER OFFER ANY REWARDS AND DISCOUNTS?
Yes, they do.
In fact, there are two possible rewards that a Discover borrower can receive. These are as follows:
- Good Grades – Discover gives a one-time cash reward on every student borrower that earns at least a 3.0 GPA (or its equivalent). The award that the company gives is equal to 1% of the loan amount.
- Graduation – If a student borrower graduates from his or her degree program below six years after the loan’s disbursement, he or she may qualify for a Graduation Reward, which is equivalent to 2% of the total outstanding loan balance.
Also, Discover is just one of the very few lenders that offer multi-year approval, which means qualified borrowers can pre-qualify for future undergraduate loans to cover the rest of their school needs.
Meanwhile, Discover also offers auto-debit rewards. Basically, if you sign up for automatic withdrawal for your minimum monthly payment, the company will reduce your interest rate by 0.25%.
Furthermore, if you make interest-only payments while in school, you may also qualify for a 0.35% discount from Discover.
Now, that is indeed a great deal, right?
IS REPAYING A DISCOVER STUDENT LOAN AVAILABLE?
The answer to the question is yes. Discover provides repayment options.
In fact, they offer not just one but three repayment options, which are as follows:
In-School Interest-Only – You can qualify for a 0.35% point interest rate discount if you make interest-only monthly payments while you are still in school, and during the six months after your graduation.
In-School Fixed – You are required to pay a fixed payment of $25 per month while you are in school and during the six months after graduation.
Deferred – You may defer making any payments up to six months after graduation.
WHAT ARE THE PROS AND CONS OF DISCOVER STUDENT LOANS?
Before we end our Discover student loans review, it is but right to share with you some of the pros and cons we found about Discover student loans. This, hopefully, gives you clarity and guidance in assessing whether loaning money from Discover is the perfect choice for you.
- No loan fees and charges. We honestly love the fact that Discover does not charge any loan fees and charges, which we find appropriate given the fact that the borrower is a student.
- Borrowers may pre-qualify for future student loans. Once approved, borrowers may be pre-approved for future Discover student loans. No need to re-apply.
- It provides rewards for good grades. Discover gives out a one-time cash reward for borrowers with good grades. The amount is equivalent to 1% of their Discover student loan. Qualified students must have at least 3.0 GPA or its equivalent.
- It provides flexible in-school options. Discover provides borrowers with three repayment options while borrowers are in school.
- The loanable amount is up to full college costs. Discover student loans, students can borrow money up to the full cost of attendance for either a college program or a graduate program.
- Open for international students. If you are an international student looking for a student loan provider, Discover may be the right lender for you. They accept applications from international students provided they have a creditworthy U.S. citizen or permanent resident to act as their co-signer.
- It does not provide parent-only student loans. Although Discover offers to lend for undergraduates and many other options for different graduate programs, it does not provide a parent-only student loan, which refers to the kind of loan that parents can take out on their children’s’ behalf.
- It does not provide soft credit checks or rate quotes. Unlike many other lenders that provide soft credit check and rate estimates, Discover does not offer any pre-qualification or rate quotes. The company instead requires a full application, which includes a hard credit check.
- No co-signer release. This basically refers to not allowing a borrower to remove his or her co-signer while the loan is still in repayment.
FINAL THOUGHTS ON DISCOVER STUDENT LOANS REVIEW
To be honest, there’s a lot of things to love about Discover student loans. They offer fair terms, they have various student loan options depending on your level of education, and more. But you know, what really draws us and perhaps a lot of student borrowers out there to Discover is the fact that their student loans are free of fees and charges. It’s very student-friendly.
While it is not perfect because we’ve seen a few flaws as well, the good things about Discover student loans overpower the not-so-good ones.
So, have you enlightened already about Discover student loans?