Orlando Harmon
Discover no longer offers or services student loans as of January 31, 2024. Previously, Discover Bank offered private student loans to students attending over 2,400 colleges and universities. While Discover student loans were insured, it is unclear whether they were federally insured. Discover student loan borrowers had flexible repayment options, including the ability to make interest-only payments while in school.
| Characteristics | Values |
|---|---|
| Discover student loans | No longer offered or serviced |
| Discover Bank student loans | No longer accepting applications |
| Forbearance or deferment due to financial hardship options | Not disclosed |
| Forgiveness | In the event of the primary borrower's death or permanent disability |
| Co-signers | Accepted |
| Origination, application or late fees | None |
| Qualifying criteria | Not disclosed |
| Prequalification | Not available |
| Credit history | Pulled by Discover |
| Loan term | 15 years for undergraduates, 20 years for graduates, 10 or 20 years for consolidation |
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What You'll Learn
Discover no longer offers student loans
Discover® no longer offers or services student loans. The company stopped accepting applications for student loans starting on February 1, 2024. Discover plans to sell its student loans business and transfer the servicing of these loans to a third-party provider.
Discover had offered private student loans to students attending more than 2,400 colleges and universities. The company did not disclose specific requirements or policies regarding its forbearance or deferment due to financial hardship options, but it did offer options for borrowers experiencing financial difficulty. Discover also accepted co-signers and did not charge origination, application, or late fees.
If you have a student loan with Discover, your loans and payments won’t be affected for now. All current loans will eventually be serviced by a third-party provider that has yet to be announced. Discover borrowers should keep an eye out for any changes and communications from the company.
If you were considering Discover for your private student loan needs, you may need to think about other options. It is recommended that you exhaust all your other options before you start looking for another private student loan lender. You can fill out the FAFSA® to see what scholarships and grants you may be eligible for, as well as any federal student loans that have been offered.
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Discover student loans were private
However, Discover Financial Services announced in November 2023 that it would no longer accept student loan applications as of February 1, 2024. The company cited regulatory issues as the reason for exiting the student loan business and planned to sell its private student loan portfolio to global investment firms Carlyle and KKR for up to $10.8 billion. The transaction was expected to be completed by the end of 2024, and the portfolio would be serviced by Nelnet's Firstmark Services division.
The evaluation process for Discover Student Loans considered various factors beyond just credit history. The company assessed applications based on the field of study, additional sources of financing, grades, and other information provided in the application. This comprehensive approach allowed Discover to make informed decisions about loan approvals.
Discover Student Loans offered repayment options that provided flexibility to borrowers. Students could choose to make interest-only payments while still in school, or they could opt for full repayment plans with terms ranging from 10 to 20 years, depending on their educational level. These options allowed borrowers to select a repayment strategy that aligned with their financial situation and preferences.
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Discover student loans were insured
Discover student loans were private loans, which means they were not federally insured. Federal student loans are insured by the federal government, providing protections such as income-driven repayment plans, federal debt forgiveness programs, and forbearance/deferment options through the Department of Education. Private student loans, like those offered by Discover, are typically insured by private institutions or lenders.
Discover offered private student loans to students attending more than 2,400 colleges and universities. To qualify for a Discover student loan, applicants needed good credit or a co-signer. Discover evaluated applications based on several factors, including the field of study, additional sources of financing, grades, and other information from the application.
Discover student loans had a single loan term of 15 years for undergraduates and 20 years for graduate students. Borrowers could decide whether to make payments while in school, with repayment options including interest-only payments. Discover also offered options for borrowers experiencing financial hardship, such as forbearance or deferment, and loan forgiveness in the case of the primary borrower's death or permanent disability.
While Discover student loans were insured, it is important to note that Discover engaged in unfair and deceptive acts and practices, as found by the Consumer Financial Protection Bureau. This included withdrawing payments without authorization and misrepresenting the amount of interest paid by consumers. As a result, Discover was required to pay consumer redress and a civil money penalty to resolve these issues.
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Discover student loan alternatives
Discover no longer offers or services student loans. The company was known for its undergraduate, graduate, parent, and refinancing loans, which featured competitive rates, no fees, and borrower-friendly perks.
Sallie Mae
Sallie Mae provides qualified students pursuing undergraduate and graduate degrees with loans up to the full cost of attendance at competitive rates. Undergraduate borrowers can choose repayment terms of up to 15 years, while graduate degree borrowers can choose terms as long as 20 years to help lower their monthly payments.
SoFi
SoFi offers student loan borrowers a wide variety of online graduate and undergraduate financing options, including refinance options. Its flexible repayment terms and competitive rates are just a few reasons it earned Bankrate's 2025 Borrowers with Good Credit award. SoFi also offers perks like autopayment discounts and cash bonuses for good grades.
College Ave
College Ave matches Discover's reputation for simplicity and affordability while going a step further with highly customizable loan terms. Borrowers can choose repayment options tailored to their budget, including deferred, interest-only, or flat monthly payments while in school. College Ave also offers a 0.25% interest rate discount for autopay and no origination or prepayment fees.
Credible
Credible is an online marketplace that allows borrowers to compare multiple refinancing offers from top lenders. This transparency makes it an excellent choice for borrowers who want to shop around for the best rates and terms. Credible guarantees that its platform is free to use and won't impact your credit score to view initial offers.
It's important to note that refinancing federal student loans into private student loans, such as those offered by the above alternatives, may result in the loss of certain protections and benefits offered by federal loans. These include income-driven repayment plans, federal debt forgiveness programs, and forbearance or deferment options through the Department of Education.
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Discover student loan repayment options
Discover Student Loans no longer offers or services student loans. However, here is some information on Discover student loan repayment options before the merger.
Discover student loan borrowers could decide whether to make payments while still in school. One repayment option was interest-only payments while in school. Discover also accepted co-signers. The company did not disclose specific requirements or policies regarding its forbearance or deferment due to financial hardship options. However, Discover offered alternatives for borrowers facing financial difficulties. For example, if the primary borrower died or became permanently disabled, the loan was forgiven for both borrowers and co-signers.
Discover student loans had no origination, application, or late fees. The company offered a single loan term of 15 years for undergraduates, 20 years for graduate students, and 10 or 20 years for student loan consolidation.
If you had a Discover student loan that did not transfer to Firstmark, you should contact Discover for your statements and tax forms. You can also contact Firstmark Services to access your account or call 1-888-295-0910 for questions regarding payments, tax documents, and other loan-related documents.
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Frequently asked questions
No, Discover no longer offers or services student loans.
Discover student loans are private loans. As of 1 January 2024, Discover is no longer accepting new student loan applications.
There are plenty of other student loan lenders with competitive rates and perks. Sallie Mae, for example, provides qualified students pursuing undergraduate and graduate degrees with loans up to the full cost of attendance at competitive rates.
