While Discover Student Loans offered competitive rates and benefits such as no origination fees, they are no longer available for new applications. Federal Direct PLUS Loans, despite having origination fees and potentially higher interest rates, remain a viable option, especially for those seeking federal loan benefits like PSLF and income-driven repayment plans. However, borrowers should be aware of the potential for customer service issues and the accrual of interest during deferment and forbearance.
| Attribute | Discover Student Loans | Federal Direct PLUS Loans |
|---|---|---|
| Interest Rates (Fixed and Variable) | Fixed: Historically ranged from 5.49% to 13.99%. In 2014, fixed interest rates started at 5.99% APR. Variable: Historically ranged from 2.99% to 13.99%. In 2014, variable interest rates started at 2.99% APR and were based on the three-month LIBOR. | Fixed interest rates determined each year. For loans disbursed between July 1, 2025, and June 30, 2026, the interest rate is 8.94%. No variable interest rate options. PLUS Loans generally have higher interest rates compared to other federal student loans. |
| Loan Origination Fees | Discover did not charge loan origination fees. | For loans disbursed on or after October 1, 2020, the origination fee is 4.228%. This fee is deducted from each loan disbursement and is a percentage of the loan amount. |
| Repayment Options | Discover offered various repayment plans, including immediate, interest-only, and deferred payments while in school. Options for temporary payment relief included deferment and forbearance. Deferment: Available for situations like being in school (at least half-time), military duty, public service, or medical residency. Forbearance: Hardship forbearance was available for economic hardship. | Standard, Graduated, and Extended repayment plans available. Extended plans can last up to 25 years. Parent PLUS loans are eligible for the Income-Contingent Repayment (ICR) plan if consolidated into a Direct Consolidation Loan. Deferment and forbearance options are available, but interest continues to accrue during these periods. |
| Eligibility Requirements | Must be pursuing a bachelor's or associate degree at a reputable college. Applicants had to be at least 16 years old. A credit score of 660 or above (for the borrower or cosigner) was considered good. A cosigner who is a U.S. citizen or permanent resident might have been required. | For Parent PLUS Loans: Borrower must be the parent of a dependent undergraduate student enrolled at least half-time. Both borrower and student must be U.S. citizens or eligible non-citizens. Borrower must not have an adverse credit history and must complete the FAFSA. For Grad PLUS Loans: Borrower must be a graduate or professional student enrolled at least half-time, a U.S. citizen or eligible non-citizen, must not have an adverse credit history, and must complete the FAFSA. General requirements for federal student aid must be met. |
| Loan Limits (Maximum and Minimum) | You could borrow up to the total cost of attendance minus any financial aid received. | Maximum loan amount is the cost of attendance at the school, minus any other financial aid received. Applications are subject to a requested minimum loan amount of $1,000. |
| Cosigner Options and Release | A cosigner wasn't always required but could increase approval chances and potentially lower the interest rate. Discover doesn't offer cosigner releases for new loans. However, if you had a former CitiAssist loan that Discover purchased, you might be eligible for cosigner release if you meet specific requirements. | A cosigner is not typically required. However, if a parent does not pass the credit check, they can still qualify for a PLUS Loan by obtaining an endorser. |
| Discounts and Rewards | Good Grades: Students with a GPA of 3.0 or higher could receive a cash reward. In some cases, this was a 1% cash reward. Auto-Debit Reward: Enrolling in automatic payments could reduce the interest rate by 0.25%. | Borrowers who sign up for auto-debit may receive a 0.25% interest rate reduction. |
| Customer Service Quality and Accessibility | Discover serviced its own loans. Support was accessible via phone, online chat, or secure message. | Customer service experiences can vary. Borrowers experience similar customer service and poor communication issues across the board with all loan servicers. It's advisable to research the specific servicer assigned to the loan. |
| Application Process (Ease and Speed) | The application process was completed online. Loan processing could take 30 to 45 days. | Involves completing the FAFSA, a PLUS loan application, and a Master Promissory Note (MPN). The PLUS Loan application can be completed online in about 20 minutes. Requires a verified FSA ID, school name, and other personal and employment information. The Department of Education will conduct a credit check. |
| Loan Servicing Experience | Discover serviced its own loans, but now Firstmark Services handles the servicing. | Borrowers don't get to pick their loan servicer unless they opt to federally consolidate. Loan servicing experiences can vary, and borrowers have reported issues with communication and processing. You can find your loan servicer by logging in to your StudentAid.gov account. |
| Prepayment Penalties | There were no prepayment penalties. | There are no prepayment penalties. Borrowers can pay off their loans early without any additional fees. Extra payments are applied first to unpaid fees and costs, then to unpaid interest, and then to the current principal. |
| Borrower Protections (e.g., disability discharge, death discharge) | In cases of death or permanent disability, Discover would discharge the remaining loan balance. | Eligible for discharge upon the total and permanent disability or death of the borrower or the student. If consolidated into a Direct Consolidation Loan, Parent PLUS Loans can become eligible for the Income-Contingent Repayment (ICR) plan and may qualify for Public Service Loan Forgiveness (PSLF). Deferment and forbearance options are available. |