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Discover Student Loans

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When it comes to private student loans, it’s important to pay attention to the fine print. Many lenders charge additional fees, such as origination fees or late fees, which can add to your total costs.

Discovery is an exception. It charges absolutely no fees: it charges no application or origination fees, and it doesn’t even charge late fees. With Discover’s competitive interest rates and no processing fees, it’s a great choice for borrowers looking for a private loan to cover the remainder of their education expenses.

Discover Student Loans Overview

Although Discover is best known for its credit cards and home loans, it’s also a popular student lender. It works with more than 2,400 schools and disbursed more than $10 billion in student loans in 2021, according to the company’s annual report.


  • Cash rewards for good grades
  • No application fee, origination fee, or late fee
  • Most loan options have no maximum loan amount


  • Delegate release not provided
  • only one repayment period
  • No vocational training or certificate program loans

There are no origination fees, application fees, or late fees for any of Discover’s loans. You also never have to worry about prepayment penalties, so you can pay off your loan early and save on interest.

While some private lenders have caps on how much you can borrow, Discover has no loan limits; you can borrow up to the total cost of attending school. Repayment terms vary depending on the type of loan you take out – undergraduate loans have a term of 15 years – but you can choose from three different repayment options to manage your loan while you are in school. Repayment options include interest-only, fixed monthly payments and deferred payments.

Because students often have limited credit histories, most student borrowers need a co-signer on their loan application to qualify. Note, however, that Discover does not offer co-signer publishing. If you default on your payments, the co-signer remains responsible for the loan until the loan is paid in full. The only way out is if you refinance the loan and qualify to have it entirely in your name.

service found

Discover offers loans for undergraduates, graduate school, medical school, law school, healthcare professional interns, bar exam study, and student loans for parents. Other useful products for students include student loan refinancing options and student credit cards.

All of Discover’s loan options are available with variable or fixed interest rates. You can get a 0.25% interest rate reduction by signing up for AutoPay, and borrowers who opt for interest-only repayments are eligible for an additional 0.35% interest rate discount.

For most loans from Discover, you can choose one of three payment plans:

  • Deferred: The costliest of the three plans, deferred repayment allows you to defer payments until you graduate or leave school. You also have a short grace period before your monthly payment is required.
  • Interest-only payments: With an interest-only plan, you make payments based on the interest you accrue each month. You don’t start paying the principal until you leave school.
  • Fixed: The fixed monthly payment option lets you pay only $25 per month while you are in school. After graduation, your payment increases to include principal and interest.

However, parent student loans are not eligible for any of these payment methods. All of Discover’s parent loans are immediate payment plans, so you must begin making full monthly payments immediately after final loan disbursement.

Discover does offer repayment options for borrowers experiencing financial problems. For example, a borrower may qualify for a temporary loan deferment or payment deferral. Discover provides loan discharge services to borrowers who have passed away or are totally and permanently disabled.

what they don’t offer

If you are considering a loan from Discover, consider the following disadvantages:

  • No loan prequalification tools: Most student loan lenders have prequalification tools that allow you to check interest rates without damaging your credit. However, Discover doesn’t have that feature, so you have to start the application process and agree to a hard credit check to view your loan options and check your eligibility.
  • Posting without a co-signer: Most private student loans require a co-signer. Many companies allow you to apply for a co-signer waiver after two or three years of on-time payments, but Discover does not have a co-signer waiver.
  • No loans for certificates or career training programs: Discover student loans can only be used toward degree work. If you want to attend a coding bootcamp or complete a certificate program, you will have to work with other lenders.

Credentials found

Unlike other companies that partner with banks to originate loans, Discover is its own lender. It also services all loans it issues. Discover is a member of the Federal Deposit Insurance Corporation (FDIC).

Licensing and Registration

Discover is licensed to originate private student loans in all 50 states, so borrowers across the country can apply for its loans.

Awards and Certifications

Discover is often the top choice for student loan rankings. It was voted 2021’s “Best Free Lender” by Forbes.

third party rating

Like other student loan companies, Discover’s student loan products have not been ranked by third-party consumer agencies. However, Discover’s other financial products, including credit cards and loans, have consistently come out on top. In JD Power’s 2021 Consumer Loans and Credit Cards Study, Discover ranked No. 2 in both categories.

regulatory action

In 2020, the Consumer Financial Protection Bureau (CFPB) issued a consent order against Discover. The order states that Discover violated a 2015 consent decree based on the CFPB’s findings that Discover misrepresented minimum loan payments, the amount of interest owed by consumers and other material information. The order requires Discover to pay at least $10 million in consumer compensation and a $25 million civil penalty.

Regulatory action against lenders of Discover’s size is not uncommon, but it highlights the importance of carefully reviewing loan documents and making sure you understand the terms and fees before signing a contract.

Accessibility features found

Discover stands out from other lenders for its customer service. Its support team is available 24/7, and Discover also offers online educational guides.


Unlike other lenders, Discover’s customer service team is available 24 hours a day, 7 days a week.

user experience

While other companies rely on third-party loan servicers to handle borrowers after a loan is issued, Discover services the loan itself. If you are having difficulty making payments or have questions about your account, you may contact Discover.


Discover has great educational resources on student loans on its website, but it doesn’t have a prequalification option. To check your loan eligibility and see your interest rate, you must agree to a hard credit inquiry.

Discover customer satisfaction

Discover is a large company that offers a range of financial products. Customer complaints tend to focus on other products, such as credit cards or mortgages, rather than student loans.

Customer complaints

On TrustPilot, Discover has a TrustScore of 1.8 out of 5. Although Discover has an A+ rating from the Better Business Bureau (BBB), based on a limited number of customer reviews, it has a rating of 1.16 out of 5.

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