Discover Student Loans: Opportunities for Education in 2024

What Are Discover Student Loans?

Discover student loans help students pay for college or university. Many people use these loans to pay for their education when they can’t cover the full cost with their own money or scholarships. Discover provided these loans for many years but stopped offering them on January 31, 2024.

Even though they no longer accept new applications, students who already have Discover student loans can still make payments and manage their loans as usual.

5 Why Did Discover Stop Offering Student Loans?

Discover decided to stop offering Discover student loans because the company wanted to focus on other areas of its business, like banking products. The company’s leadership, including the interim CEO, John Owen, said that after a regular review, they decided selling the Discover student loans business would help Discover grow in other areas.

Discover’s goal is to focus on the things they do best and bring more value to their shareholders. So, Discover decided to stop taking new Discover student loans applications and sell their current Discover student loans to another company.

What Happens If I Have a Discover Student Loan?

If you already have a Discover student loan, you don’t need to worry. Your loan terms, interest rates, and monthly payments will not change. Discover will transfer your loan to another company that will handle it from now on.

For now, you should keep making payments the same way you did before. Discover will send you information about the transfer, and you’ll get a message from the new company, too.

Who Will Take Over My Discover Student Loans?

Discover is transferring their student loans to a company called Firstmark Services, which is a part of Nelnet, a big company that handles Discover student loans. Firstmark will start managing your loan, but nothing will change about how much you owe or your repayment plan.

You will need to update your payment details when the loan officially moves over to Firstmark, but you’ll get clear instructions about how to do that when the time comes.

How Will I Know When My Loan Is Transferred?

Discover will send you notices before the loan transfer happens. They plan to let you know 60 days, 30 days, and 15 days before the transfer, so you have plenty of time to prepare.

Firstmark, the new company managing the loans, will also send you a welcome notice explaining how to set up payments with them. They will make sure you have all the information you need so you won’t miss any payments.

Do I Need to Do Anything Right Now?

If you have Discover student loans, the best thing to do right now is to make sure Discover has your correct contact information. Make sure your phone number, email, and mailing address are up to date so you don’t miss any important messages about your loan.

Also, if you use automatic payments to pay your student loan, you’ll want to check that these payments will continue smoothly after the transfer to Firstmark. You may need to re-enter your bank details when the transfer is done.

What Happens to My Credit Report?

Your credit report will show that your Discover student loans were moved to Firstmark. This means that Discover will no longer report on your loan, and Firstmark will start reporting instead.

This change won’t affect your credit score, and everything will continue normally. Your loan history will still appear, and it will look like you have always been making payments, even with the new company.

Will My Loan Terms Change After the Transfer?

No, your loan terms won’t change when Discover transfers your Discover student loans to Firstmark. This means the interest rate you agreed to, the amount of time you have to repay the loan, and the monthly payment amount will stay the same.

Discover has promised that everything will remain the same except for the company managing the loan. The only thing you might need to do is update how you make your payments once the transfer is complete.

What If I Need More Money for School?

Since Discover is no longer offering new Discover student loans, you will need to find other options if you still need money for school. Here are some steps to follow:

Look for Scholarships: Scholarships are free money you don’t have to pay back. You can use tools like the Scholarship Search by Sallie Mae to find scholarships based on your major, location, and more.
Fill Out the FAFSA®: This is the form you fill out to see what government grants, scholarships, and loans you qualify for. The government offers many types of financial aid, and it’s a good idea to use this first before looking at private loans.
Look at Other Private Loans: If you still need more money for school after getting scholarships and government aid, you can apply for private student loans from other lenders. Here are a few options you might consider:

Alternatives for Discover Student Loans

1. Sallie Mae

Sallie Mae is one of the most well-known private student loan lenders. They offer loans for both undergraduate and graduate students. Sallie Mae allows you to borrow up to the total cost of your education, which means you can cover your full tuition, room and board, and other school costs.

They also offer flexible repayment plans and options like a cosigner release, which can help if someone else helped you get the loan.

2. Citizens Bank

Citizens Bank is another popular lender. They offer loans with competitive interest rates and allow you to borrow up to $350,000. One great thing about Citizens Bank is that if you already have an account with them, you can get special customer discounts.

Citizens Bank also has branches across the U.S., so if you prefer speaking to someone in person, this could be a good option for you.

3. SoFi

SoFi is an online lender that is known for its customer perks. Like Discover, SoFi doesn’t charge application fees, origination fees, or late fees. They also offer a range of member benefits, like free financial planning, and they have flexible repayment plans.

SoFi also allows you to borrow up to the full cost of attendance for your school, which is similar to what Discover used to offer.

Do You Know? Navient is Quietly Offering Private Student Loan Forgiveness – Latest News

Why It’s Important to Maximize Free Money First

Before you take out a private student loan, it’s important to use all the free money you can get. Scholarships, grants, and federal student loans usually have better terms than private loans. They can save you a lot of money in the long run.

Here’s what you can do:

Fill Out the FAFSA®: This form helps you see what government aid you qualify for. The government offers grants, which are free money you don’t have to pay back, and federal student loans, which often have lower interest rates than private loans.
Search for Scholarships: You can find scholarships based on your background, your major, where you live, and other factors. Scholarships don’t need to be repaid, so it’s like getting free money for school!

What Happens If You Don’t Pay Your Loan?

If you miss payments on your student loan, it can hurt your credit score, and you may face late fees. If you continue to miss payments, your loan could go into default, which means the company could take legal action to get their money back.

That’s why it’s very important to keep making your payments on time, even when your loan transfers from Discover to Firstmark. If you have trouble making your payments, you can always contact the loan servicer to see if they can help with a different repayment plan.

5 How Discover’s Exit Affects the Private Student Loan Market

Now that Discover is leaving the student loan business, some people wonder what will happen to the private student loan market. Other lenders, like Sallie Mae, Citizens Bank, and SoFi, will likely take on more borrowers now that Discover is gone.

For students looking for private loans, this could mean more competition between lenders. This might lead to better rates or more benefits, as companies try to attract more customers.

Discover student loans helped many students pay for college for years, but the company decided to stop offering new loans in 2024. If you already have Discover student loans, don’t worry—your loans won’t change. It will just be transferred to a new company called Firstmark.

If you need more money for school, there are other private loan lenders like Sallie Mae, Citizens Bank, and SoFi who can help. Just make sure to use all your free money options, like scholarships and government aid, before taking out a private loan.

Frequently Asked Questions

Will my loan change when Discover transfers it to Firstmark?

No, your loan terms, interest rate, and payment schedule will stay the same.

How will I know when my loan is transferred?

Discover will send you notices before the transfer happens, and Firstmark will send you a welcome notice once they take over.

Do I need to do anything to prepare for the transfer?

Yes, make sure your contact information is up to date with Discover and check your automatic payments to ensure they transfer smoothly.

Can I still contact Discover about my loan?

Once your loan transfers to Firstmark, you’ll need to contact them instead of Discover.

What are my options if I need more money for school?

You can look into other private loan lenders like Sallie Mae, Citizens Bank, or SoFi or try to get scholarships and government aid first.