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Discover Student Loans Review

Saturday, June 22nd

2024 Student Loan Provider Reviews

Discover Student Loans Review 4.5 Star Rating

Discover Student Loans

4.5 Star Rating
  • "A+" rated and accredited with the BBB
  • Competitive rates on both fixed-rate and variable-rate loan offers
  • Loans available for all degree-seeking levels of study, including associate's programs
  • Can be enrolled half-time and still be eligible for a student loan
  • 15-year term on all loans
  • Minimum loan amount: $1,000
  • Rewards for good grades

There are so many advantages to getting a student loan through Discover. It's one of the only lenders that offers funding for associate's degree programs, and no matter which type of loan you need, you only have to be enrolled a minimum of half-time. The minimum loan amount is $1,000, which makes it easier to borrow only what you need; some rival lenders have $5,000 minimums for comparison. And, Discover can prequalify you for subsequent academic years, to help the process go quickly and smoothly - and no further impact on your credit report. Also, this is one of the only lenders we've seen that lets students as young as 16 apply for a loan; given how many students are graduating high school early and moving on to college, that's needed more than ever.

Cash rewards for good grades

But, there's more! You know Discover Card as one of the original ways to get cash back when using a credit card, and they add those kinds of rewards to their student loans as well. For example, their undergraduate loans offer a one-time cash reward of 1% on each new loan if you have at least a 3.0 GPA. Undergraduate freshmen are also eligible for an additional 1% reward on their first loan: Discover wants to encourage you to consider them for all of your educational financing, right from the start of your studies. Finally, like most lenders, you'll get a rate discount of 0.25% if you set your account up for automatic debits of your payments.

3 repayment options

Discover student loans have three repayment options: in-school interest only (which comes with a 0.35% interest rate discount), in-school fixed payments of $25, or deferred until six months after graduation or when your enrollment goes below half-time. Of course, you're welcome to make extra payments at any time you like even if you're not in your repayment period.

15-year term on all loans

Every Discover student loan has a 15-year repayment term. Interest rates are very competitive on both variable-rate loans and fixed-rate loans. Their posted rates tend to be higher than other student loan lenders, but the reality is that very few students qualify for those super-low rates advertised elsewhere - so you'll likely wind up with a very competitive rate here.

Best Student Loan Providers

New-and-improved reputation

We're also very pleased to see how much improvement has been made with Discover's reputation as a student loan provider. In previous evaluations, we noted that the company had serious servicing issues back in 2015, and we're glad to report that those problems genuinely seem to be a thing of the past. Not only does Discover Card have a perfect "A+" and accreditation from the Better Business Bureau, but their unfiltered student loan reviews describe an easy application process, fantastic customer service (including 24/7 phone help), and being able to get funding here when other lenders said no. Many comments come from students (and parents) who have used Discover student loans for every academic year and who wouldn't go anywhere else. That's the kind of feedback we love to hear!

No preapprovals, no cosigner release

We only found two slight downsides to these student loans. One is that there's no way to determine in advance if you're likely to qualify for a loan here: you jump right into the loan application, which results in a hard pull on your credit report, and Discover offers no ballpark of which credit scores are likely to be approved (neither for you nor for any cosigner you might have). Speaking of cosigners, that's the other disappointing aspect of these loans: there's zero option for cosigner release, even after the fairly standard 24 months of consecutive, on-time payments required by other lenders. If you cosign for a Discover loan, you are responsible for it for the full 15-year life of that loan. Ouch.

Great choice for most students

You might not have thought that a credit card company would be an option for your student loans, but we hope you'll think again! Discover has made a huge leap in our rankings, and for good reason: why not get some money back for those terrific grades you're getting? For many students who wouldn't be eligible for a loan somewhere else, Discover provides a reliable avenue to paying for an education.

Where Can You Find the Best Student Loans?

With 45% of high school graduates finding it necessary to take on student debt to finance their higher learning, that's an important question to answer. While most student loan debt comes from federal loans, some people discover that their government loans just aren't enough to cover the full costs of tuition, room and board, expensive textbooks, and everything else necessary for their college education.

If you find yourself in that situation - for your studies or your children's - you might get overwhelmed trying to figure out where the money will come from. And even once you've selected a lender, you still need to decide what repayment terms are best. Fixed- or variable-rate? Interest-only or small fixed repayments while still in school or fully deferred for 6-9 months after graduation? Repaying over five years or twenty? There are a lot of factors to consider that are unique to you.

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Student Loan Provider FAQ

Most students need a loan to fund the full cost of their college education. While the majority of student loans in the United States come through federal programs, there are also private loans available. You usually have to start making repayments on student loans six months after your last semester, though you can start sooner if you wish. Student loans often have repayment terms of at least 10 years.
Yes, very easily. If you're applying for federal student loans, you'll complete the FAFSA online. For private student loans, there are several ways to apply: either directly with a financial institution, like Discover or Wells Fargo, or using a platform that connects you with multiple lenders using a single quote request or application.
Unlike many other types of borrowing, student loans are designed to be affordable - it's rare to be charged an application or origination fee, and you should be able to pay off your loan early with no penalties. Interest rates are also much lower than credit cards and personal loans, and you'll usually have very long repayment terms: starting 6 months after your last semester and often stretching 10 years into the future. Expect interest rates between 1% and 6%, but watch out for fixed vs. variable APRs.
Your student loan will probably be disbursed directly to your school, not deposited to your personal bank account. That's a good thing if you want to ensure that your loan money actually gets used for your education! Because the process requires your school to certify the loan amount, the process can take a few days or more. It's a wise idea to start the loan application process early, to make sure there's plenty of time to meet your school's payment deadlines.
If you have a financial hardship or other eligible circumstance, you can request to defer your student loan repayments. Most lenders allow you to suspend your payments for up to three years if you qualify. Contact the servicer of your student loan to find out what requirements you need to meet to defer your loan.
Forbearance is similar to deferring your student loan payments. If you don't qualify for a deferral but still can't pay your student loan, you might be able to get your payments reduced or suspended temporarily, for up to 12 months. You'll need to get in touch with the servicer of your student loan to see if you're eligible for a forbearance arrangement.
In limited circumstances, yes. It usually depends on the type of student loan you have, the lender, and your situation. Student loans may be forgiven (or, essentially, written off) in the event of the disability or death of the borrower; issues with the school, like closure, error or fraud; income-driven repayment plans or employment-based forgiveness programs.
Yes, most of the time. Tax laws are changing constantly, but in the past students have been able to reduce taxable income by as much as $2,500 based on student loan interest paid, as long as they meet eligibility criteria (like having a qualified student loan that was used exclusively for educational expenses).
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Continued from above...

Fortunately, there are quite a few providers of student loans that can help you not only figure out those answers but also connect you with the money you need to pay for school. Many of them can even prequalify you for a loan with just your name, address and birthdate, with no impact on your credit report. Rest assured that millions of students (and many of their parents) have successfully navigated this process - and you can too.

Here are several aspects of student loan providers to keep in mind as you decide which ones merit further consideration:

  • Referral service or direct lender: Some sites serve as a comparison shopping platform, allowing you to get preliminary information about what loans might be available to you. These referral services may or may not use your information to complete some of the first steps of the application process. Other student loan sites directly connect you with the funding you need.
  • Interest rates. Don't be overly impressed by the super-low interest rates posted by any student loan provider: they almost always come with the caveat that only the "most qualified" candidates qualify for the best rates (and we've yet to find anyone that actually got a loan with rates that low). Just make sure that the rate you're offered is reasonable and competitive with other loans.
  • Repayment options. There are so many different ways to configure a student loan, like repayment terms ranging from 5-20 years, fixed and variable rates, and repayments either while still in school or deferred until after graduation. The more choices available to you, the more likely it is that you'll get loan terms you can afford.
  • Loan servicing. Getting a student loan is just the beginning. Take into account what other students have said about the experience after the application has been approved. Are funds disbursed quickly? Does the customer service team handle issues well? Can you expect any unpleasant surprises (like payments not being recorded accurately or not being able to reach support)?

To help you get the funds you need for your education, TopConsumerReviews.com has evaluated and ranked the best options for student loans today. We're confident that this information will make it possible to find the right way to cover the costs of your tuition, books and more!

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