does discover student loans require a cosigner

Last Updated on December 21, 2022 by Omoyeni Adeniyi

Discover Student Loans is a great way to finance your education without having to pay the high interest rates of other student loans. Discover Student Loans can help you get the money you need, whether it’s for a degree or certificate program, or just to cover some of your living expenses while you’re enrolled. In this post, we explore all you need to know about does discover student loans require a cosigner, discover student loans requirements, do discover student loans go directly to the school, discover student loans interest rate and can i get a discover student loan without a cosigner.

6 Common Mistakes to Avoid When Filling Out Your FAFSA

You don’t have to have a cosigner when you apply for a Discover Student Loan, but if you do have one, that person will be responsible for repaying the loan if you don’t. The good news is that most people who take out these types of loans are very successful at paying them back on their own—so if your parents are willing and able to co-sign, we recommend asking them! Read on to know more about does discover student loans require a cosigner, discover student loans requirements, do discover student loans go directly to the school, discover student loans interest rate and can i get a discover student loan without a cosigner.

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does discover student loans require a cosigner

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Undergraduate Loan Features

Am I eligible for a Discover Undergraduate Loan?

To qualify, you must:

  • Be enrolled at least half-time in a Bachelor’s or Associate’s degree program at an eligible school.
  • Be seeking a degree.
  • Be making satisfactory academic progress as defined by your school.
  • Be a US citizen, permanent resident or international student (International students require a cosigner who is a US Citizen or permanent resident).
  • Be 16 years or older at the time you apply.
  • Pass a credit check.

What is the Multi-Year Option?

Figuring out how to pay for a college degree can be overwhelming. With our Multi-Year Option, we’re able to pre-qualify eligible borrowers for student loans to help cover future academic periods.

When it’s time to apply for another student loan, if eligible, you’ll experience a hassle-free process and no impact on your credit.

How much can I borrow?

  • Each year, you can borrow up to 100% of your school-certified cost of attendance (including tuition, housing, books and more) minus other financial aid. Aggregate loan limits apply.
  • The minimum amount is $1,000 for each loan.
  • We certify and disburse loan amounts through your school so you do not borrow more than you need.

Do I need a cosigner?

Private student loans are credit based. Students with no credit history or a low credit score may find it difficult to qualify for a private student loan on their own. Students may have the option to apply for a Discover student loan with a creditworthy cosigner. By applying with a creditworthy cosigner, you may improve your likelihood for loan approval and may receive a lower interest rate.

What is the difference between a fixed interest rate and variable interest rate?

  • A fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts.
  • A variable interest rate may change quarterly during the life of the loan if the rate index changes. This may cause the monthly payment to increase, the number of payments to increase, or both.

What is 3-Month CME Term SOFR?

The variable rate for student loan applications received on or after November 14, 2021 is based on 3-Month CME Term SOFR index. 3-Month CME Term SOFR (Secured Overnight Financing Rate) is a rate index based on what the market expects rates to be over the next three-month time period. You can find more information on 3-Month CME Term SOFR at CME Group.

What are Rewards for Good Grades?

Doing your homework has its rewards.

  • Students who get at least a 3.0 GPA (or equivalent) may qualify for a one-time cash reward of 1% of the loan amount on each new Discover Undergraduate Loan. Reward redemption period is limited.
  • If you’re an undergraduate freshman student, you also may qualify for an additional cash reward of 1% of the school-certified loan amount on your first Discover Undergraduate Loan. Reward redemption period is limited.

What is an Auto Debit Reward?

Get a 0.25% interest rate reduction while enrolled in automatic payments. To enroll, log in to your secure account or call us at 1‑800‑STUDENT.

Undergraduate Loan Repayment

What is a deferment period?

If you are in school at least half-time, on active military duty, serving a public service organization or in a medical residency, you may qualify for a deferment. A deferment period is a period of time when a borrower is not required to make any payments. During deferment, interest will continue to accrue. At the end of a deferment period, any unpaid interest will be added to your principal balance. This may increase the amount of your monthly payments and the total cost of your loan(s).

What is my repayment period?

A repayment period is the period of time during which scheduled payments are required to be made to repay the principal balance and interest on a loan. Your repayment period is 15 years after the deferment period ends.

What are my repayment options?

  • In-School Interest-Only – Required to make interest only monthly payments while you are in school and during your grace period to lower your overall loan cost and receive a 0.35% interest rate discount.
  • In-School Fixed – Required to make $25 fixed, monthly payments while you are in school and during your grace period to lower your overall loan cost.
  • Deferred – Monthly payments are not required until 6 months after you graduate or your enrollment drops below half-time.

You can make payments anytime to help reduce the overall cost of your loan and there is never a penalty for prepaying. If you’re not receiving monthly billing statements, we will send you quarterly statements showing you how much interest is accruing and how to make optional payments while you are in school.

What if I need help making my monthly payments?

If you are experiencing financial difficulties and you are unable to make your student loan payments, we have options to help. To learn more and determine if you qualify, please call our Repayment Assistance Department at 1-800-STUDENT.

discover student loans requirements

Next, we review discover student loans requirements, do discover student loans go directly to the school, discover student loans interest rate and can i get a discover student loan without a cosigner.

Written bellow are the two discover student loans requirements

  1. Students who get at least a 3.0 GPA (or equivalent) may qualify for a one-time cash reward of 1% of the loan amount on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Visit DiscoverStudentLoans.com/Reward for reward and redemption terms and conditions.
  2. The fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts. The variable interest rate and corresponding APR may increase over the life of the loan. The variable interest rate is calculated based on the 3-Month CME Term SOFR index plus the applicable margin percentage less any applicable discounts. The 3-Month CME Term SOFR index value for variable interest rate loans is 0.625% as of April 1, 2022. 3-Month CME Term SOFR is administered by CME Group and is published by CME Group on its website (cmegroup.com/termsofr). Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. This may cause the monthly payments to increase, the number of payments to increase or both. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate. Your variable interest rate (index + margin – applicable discounts) will not exceed 18%. Our lowest APRs are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate. Learn more about Discover Student Loans interest rates.

Borrow responsibly. 1. Maximize grants, scholarships and other free financial aid. 2. Compare federal and private student loans. 3. Choose the loans that best fit your needs.

do discover student loans go directly to the school

Now, we find out do discover student loans go directly to the school, discover student loans interest rate and can i get a discover student loan without a cosigner.

Five Things You Should Pay for With Student Loans (And 5 You Shouldn’t)

When your loan funds are disbursed, they go to your school first to pay tuition, fees, and room and board. Any additional funds will be provided to you as a student loan refund to cover other education-related expenses.

While you won’t have to provide your lenders with receipts to show how you spent the money, you likely promised to use the loan funds to pay for education-related expenses when you agreed to the loan terms. Remember that you’ll eventually have to pay back your loans-with interest-so be judicious about how you spend your money.

Here are five things you can use your student loans to pay for:

1. Tuition and Fees

Generally your largest education-related expense, tuition and fees cover the basic costs of enrollment at your school. Tuition is the cost for your classes, while fees are the (often required) costs directly associated with attendance, such as activity fees (like to use recreational facilities), library fees, parking permits, and technology fees.

Prices vary widely depending on what type of school you go to, ranging from an average of around $3,800 per year at a public two-year college to more than $38,000 per year at a private four-year college, according to a report from the College Board®.

2. Housing Expenses

Whether you live in a dorm or an off-campus apartment, you can use your student loans to pay for housing and related expenses such as utilities. Living expenses can also vary greatly depending on where you live and whether you attend an urban school (where housing tends to be more expensive) or a rural one, as well as whether you go to a public two-year college or a private four-year school. The College Board reports that the average price of on-campus housing ranges from about $9,100 to $13,300.

If you’re using your student loans for off-campus housing, it’s important to know when your loan money will be disbursed to you. Plan ahead so that you have cash on hand when your rent and other bills are due.

3. Transportation

It can be expensive getting to and from school, but student loans can help you cover the costs. You can use your student loan proceeds to pay for a parking pass, gas expenses, public transit costs, or flights to and from school. To help you save money, consider not keeping a car on campus, carpooling, and using a bike or other alternate forms of transportation.

4. Meals

Student loans can cover your meal plan and other food expenses during college. There are often several types of meal plans offered from commuter meal plans to plans for students living on campus full-time. Be sure to look at the options closely and be realistic about what will work best for your eating habits.

5. Textbooks and Supplies

When you’re taking a full course load, and each class requires a textbook (or more than one!), book costs can really add up. Since books are essential to your education, you can use your student loans to pay for them. Similarly, you can use your loans for other required supplies and equipment for classes. Computers and other technology like tablets can fall into this category, too. To help save on costs, it’s best to look for used books and refurbished electronics. You can also talk to your professors at the beginning of the term to see if you can buy earlier editions of a textbook to help reduce classroom costs.

Here are five things your student loans do not cover:

1. Spring Break

Student loans aren’t meant to pay for vacations. And if you can’t afford to cover the cost of a trip to Cancun without misusing your student loans, then you should rethink your spring break plans.

2. Eating Out

Everyone gets tired of eating in the dining halls day after day, but going out to restaurants on a regular basis can add up quickly. And even inexpensive takeout starts to become pricey when you pay for it with borrowed money —and then have to pay interest on that loan. If you have access to a kitchen (or even just a microwave), consider cooking some of your meals to add variety into your diet, and save dining out for special celebrations.

3. Dorm Room Accessories

Housing costs like rent and electricity are essential. But no matter how badly you want to deck the walls with posters and warm up the room with an area rug, these purchases are not “necessities.” Instead, you can save money and hone your DIY skills by finding creative (and inexpensive) ways to inject some character into your room.

4. A Brand New Car

Just because you need to get to and from campus doesn’t mean you need fancy new wheels to do it. Stick with your current vehicle or look into mass transit and other alternative transportation options to keep costs down. If you absolutely must buy a car while in college, make a financially prudent choice and find a used car in good condition.

5. A Wardrobe Upgrade

You shouldn’t be buying apparel with student loan money. If you’re sick of your closet’s contents, host a clothing swap with friends to score some new threads without damaging your bank account.

Just because you shouldn’t spend loan money on restaurant meals, vacations, or new clothes doesn’t mean you can never treat yourself while in college. If you want new dorm room accessories, a nice meal out on the town, or other non-essentials, consider getting a part-time job or saving your money from a summer gig to cover the additional expenses. The more you can reduce your expenses, the less student loan money you will use. This savings translates into smaller loan payments and more money in your wallet after graduation.

discover student loans interest rate

Student Loan Interest Rates

Applicants may have the choice of a fixed or variable interest rate loan.

Discover Student Loans: 2022 Review | Bankrate
  • A fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts.
  • A variable interest rate may change quarterly during the life of the loan, if the interest rate index changes. This may cause the monthly payment to increase, the number of payments to increase, or both.

Interest rates for private student loans are credit based. Therefore, the interest rate is not the same for every borrower. Our lowest rates are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate.

About Student Loan Interest Rates and APR

What is an interest rate?

  • The interest rate is used to calculate the actual amount of interest that accrues on your student loan.
  • For example, if your principal loan balance is $10,000 and your interest rate is 10% (no payments are due and you make no payments), then your loan will accrue $1,000 (= $10,000 x 0.10) in interest in one year.

What is an APR?

  • The Annual Percentage Rate (APR) takes into account the interest rate, fees (if any), length of your deferment period and how interest capitalizes.
  • The APR is a number you can use to compare loans from different lenders since their interest rates, fees, deferment options and capitalization policy may differ.
  • The APR does not represent the rate at which interest accrues.
  • The APR may be different during the deferment period and the repayment period.

Why would the interest rate be different from the APR?

  • Discover Student Loans have zero fees, and no interest capitalization during the deferment period – as a result, the deferment period APR will be less than the interest rate.
  • For our student loans, accrued interest capitalizes at the start of the repayment period – since we do not charge fees, and assuming you make all your scheduled payments on time, the repayment period APR will be equal to the interest rate.

About 3-Month CME Term SOFR

The variable rate for student loan applications received on or after November 14, 2021 is based on the 3-Month CME Term SOFR index. 3-Month CME Term SOFR (Secured Overnight Financing Rate) is a rate index based on what the market expects rates to be over the next three-month time period. You can find more information on 3-Month CME Term SOFR at CME Group.

CME Term SOFR is different from Overnight SOFR and associated SOFR Averages, which are based on historical performance of Overnight SOFR. More information is available at the Federal Reserve Bank of New York.

When does a variable interest rate based on 3-Month CME Term SOFR change?

Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate.

What is the current 3-Month CME Term SOFR index?

Rates are rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. 3-Month CME Term SOFR index is used for loan applications received on or after November 14, 2021.

Quarter3-Month CME Term SOFRAvailable from CME Group on
Apr 1 – Jun 30, 20220.625%Mar 17, 2022
Jan 1 – Mar 31, 20220.125%Dec 17, 2021
Oct 1 – Dec 31, 20210.125%Sep 16, 2021

can i get a discover student loan without a cosigner

Federal student loans don’t require credit history or a co-signer. They’re also the most flexible when it’s time to repay, so use them first. But to afford college, some students may need private student loans, which are credit-based. A small number of private lenders offer student loans without a co-signer.

Federal student loans can be used to cover the cost of tuition and fees, books and supplies, and living expenses that aren’t covered by other financial aid programs. Federal student loans are also more flexible than private loans because they don’t require you to submit any income or asset information before you receive the loan.

There are two types of federal student loans: subsidized and unsubsidized. Subsidized loans have lower interest rates than unsubsidized loans but require students to maintain eligibility criteria while in school (and sometimes after graduation). Unsubsidized loans do not require students meet these requirements but may have higher interest rates than subsidized loans.

The Discover student loans are excellent in that they have good rates and they go directly to the school. There really is no reason why anyone wouldn’t be able to pay off the student loans either. They are also good at working with you on the repayment schedule and really overall one of the best in the business.