Savanna Hoffman
Discover® no longer offers or services student loans, including for international students. Previously, Discover Student Loans provided loans to international students who attended eligible schools in the USA. The loan terms and conditions required a cosigner but did not charge any fees or require payments while the students were still in school. Loan amounts from Discover could cover up to 100% of education costs. Now, international students seeking loans may consider private lenders such as MPOWER Financing, which provides loans based on future income potential without requiring a cosigner or collateral. Additionally, Discover offers various other loan options such as home equity loans, credit cards, credit card cash advances, and personal loans, which may be utilized by eligible individuals for different purposes.
| Characteristics | Values |
|---|---|
| Student Loans | Discover no longer offers or services student loans as of February 1, 2024 |
| Personal Loans | Available from $2,500 to $40,000 |
| Requirements | A valid U.S. SSN, 18 years or older, a minimum annual income of $25,000, a physical address, an active email address, and access to a computer or mobile device |
| International Student Loans | Offered to students attending eligible schools in the USA; requires a cosigner |
| Other Loan Types | Home equity loans, credit cards, credit card cash advances, auto title loans, pawnshop loans, tax refund anticipation loans |
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What You'll Learn
Discover no longer offers student loans
Discover® no longer offers or services student loans as of February 1, 2024. The company announced in November 2023 that it would sell its student loans portfolio and transfer the servicing of these loans to a third-party provider. Current Discover Student Loans customers are advised to follow the news and watch for any communication from Discover regarding any changes.
Discover Financial Services will no longer accept new student loan applications. However, the company continues to offer other financial products and services, such as personal loans and credit cards. Discover® personal loans offer borrowers the freedom to spend the loan on almost anything they want, unlike student loans that are designed for specific educational purposes.
Discover® personal loans have five minimum eligibility requirements: a valid U.S. SSN, a minimum age of 18 years, a minimum individual or household annual income of $25,000, a physical address, and an active email address with access to a computer or mobile device to finalize the application online.
Discover® also offers credit cards specifically for students, such as the Discover it® Student Cash Back card, which allows students to start building credit in college and earn cash back rewards. Additionally, Discover provides scholarship opportunities, such as the Discover® Scholarship Sweepstakes, which gives eligible students and parents a chance to win $5,000 for school.
While Discover no longer offers student loans, there are alternative options available for students seeking financial assistance for their education. These include federal and state grants, institutional and private scholarships, work-study positions, payment plans, and private student loans from other lenders. It is recommended to explore these options and consult with a financial aid counselor to determine the best course of action for one's financial needs.
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International student loans are available from other lenders
Discover Student Loans is run by Discover Bank and it used to provide student loans to international students attending eligible schools in the USA. However, Discover no longer offers or services student loans of any kind as of February 1, 2024.
A small number of lenders offer international student loans without a cosigner. MPOWER Financing, for example, provides loans to international students studying in the US or Canada based on their future income potential. Prodigy Finance offers variable-rate loans to international students in business, engineering, law, public policy, and medical programs, using a predictive credit model to determine loan and repayment terms.
When considering an international student loan, it is important to carefully review the loan rates and terms before signing anything. Variable-interest loans can be risky because the interest rate may increase over time. Fixed-interest loans, on the other hand, offer stability and certainty in repayment plans but can also be risky if the borrower starts with a high-interest rate.
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Private lenders may require a US co-signer
Discover Student Loans is run by Discover Bank, and it used to provide student loans to international students who attend eligible schools in the USA. However, Discover no longer offers or services student loans as of February 1, 2024.
Discover Student Loans required a co-signer but did not charge any fees or require payments while students were still in school. Loan amounts from Discover could cover up to 100% of education costs.
While Discover no longer offers student loans, there are other options available for international students seeking private loans. Many private lenders require a co-signer who is a US citizen or permanent resident. This provides the lender with security in case the borrower cannot afford to repay the loan or leaves the country.
It is important to carefully consider the loan rates and terms offered by private lenders before making a decision. Some private lenders may offer variable-interest loans, which are based on the borrower's likelihood of repaying the loan. These loans can be risky because the interest rate may increase over time. Other lenders may offer fixed-interest loans, which have a set interest rate throughout the loan term. Fixed-rate loans can provide stability and certainty for borrowers, especially in uncertain economic times.
It is also worth considering the possibility of refinancing a loan to obtain a lower interest rate or more favourable repayment terms. However, refinancing usually results in a longer repayment period, even if the overall amount paid is lower.
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Variable-rate loans are available for specific courses
Discover Financial Services no longer offers or services student loans, including for international students. However, international students can consider other private student loan options, such as those offered by InternationalStudentLoan.com and NerdWallet. These platforms provide loan comparison tools to help international students find the best loan options for their specific circumstances.
When considering a student loan, it is essential to understand the difference between fixed-rate and variable-rate loans. A fixed-rate loan has an interest rate that remains constant throughout the loan period. On the other hand, a variable-rate loan has an interest rate that can fluctuate over time based on market conditions. Variable-rate loans are usually quoted with a benchmark, such as the Secured Overnight Financing Rate (SOFR), and a spread, for example, "SOFR + 8%." The loan agreement will specify how often the rate will be adjusted, which could be monthly or quarterly, depending on changes to the underlying benchmark rate.
When deciding between a fixed-rate and a variable-rate loan, it is crucial to consider your risk tolerance and financial situation. Fixed-rate loans provide more predictability and stability in budgeting since the interest rate remains constant. In contrast, variable-rate loans offer the potential for lower costs if market rates stay low but come with the risk of higher costs if market rates spike. Therefore, it is recommended to thoroughly research and compare different loan options, consider seeking counsel from a financial aid advisor, and only borrow what is necessary.
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Personal loans are available from Discover
Discover® no longer offers or services student loans, including for international students. However, Discover does offer personal loans, which can be used for almost anything, including education. These loans range from $2,500 to $40,000, and funds can be sent as early as the next business day after acceptance.
To be eligible for a Discover personal loan, you must meet the following five minimum requirements:
- Have a valid U.S. SSN
- Be at least 18 years old
- Have a minimum individual or household annual income of $25,000
- Have a physical address
- Have an active email address and access to a computer or mobile device to finalize your application online
Once you meet these minimum eligibility requirements, several other factors are considered when processing your application, including your credit history and recent credit activities.
It is important to note that personal loans from Discover may have different terms and conditions than student loans, and it is always a good idea to carefully review the loan agreement before taking out any loan. Additionally, personal loans typically have higher interest rates than student loans, so it is essential to consider the financial implications carefully.
In conclusion, while Discover no longer offers student loans, international students seeking financial assistance for their education may consider applying for a personal loan from Discover, provided they meet the eligibility requirements and carefully consider the loan terms and conditions.
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Frequently asked questions
Discover no longer offers student loans. However, as of December 2022, international students could get a student loan from Discover if they attended an eligible school in the USA and had a cosigner.
There are several companies that offer private student loans to international students. Prodigy Finance offers variable-rate loans to international students in business, engineering, law, public policy, and medical programs. MPOWER Financing provides loans to international students studying in the USA or Canada based on their future income potential and without requiring a cosigner or collateral.
There are several other ways to borrow money as an international student, including home equity loans, credit cards, and personal loans. Most lenders require international students to have a cosigner who is a US citizen or permanent resident.
