Lori Meadows
Discover Student Loans is no longer accepting new loan applications or servicing student loans. If you have an existing student loan with Discover, your loan and payments will not be affected for now. Discover will eventually transfer the servicing of their loans to a third-party provider, and you will be notified of any changes. In the meantime, you can continue to manage your Discover student loan account through Firstmark Services or by contacting Discover directly for any queries. While in school, you can choose to make early payments on your student loan, which can save you money in the long run by reducing the total cost of your loan.
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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, after announcing in November 2023 that it was exiting the student loan business. Discover plans to sell its student loans business and transfer the servicing of these loans to a third-party provider.
If you have a student loan with Discover, your loans and payments won't be affected for now. Discover has stated that all current loans will eventually be serviced by a third-party provider that has yet to be announced. If you have questions regarding payments, tax documents, and other loan-related documents, you can visit Firstmark Services to access your account or call 1-888-295-0910.
If you were considering Discover for your student loan needs, you may want to explore other options. It is recommended that you exhaust all your other options before turning to private student loans. You can start by looking for scholarships, grants, work-study positions, and payment plans. If you still need additional funding, there are several types of private student loans to choose from, including degree-specific loans, international student loans, bad-credit loans, state-specific loans, and parent loans.
If you have an existing Discover student loan, be on the lookout for upcoming communications from Discover regarding any changes.
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Current loans will be serviced by a third-party provider
Discover® no longer offers or services student loans. The company stopped accepting new student loan applications after January 31, 2024, and transferred its student loan portfolio and the servicing of existing loans to a third-party provider. This means that if you had a Discover student loan, your loan and payments will not be affected, but you will now deal with a different company.
If your loan was transferred to Firstmark in 2024, you should contact Firstmark directly. You can visit Firstmark Services to access your account or call 1-888-295-0910 for questions regarding payments, tax documents, and all other loan-related documents.
If you have paid off, charged off, or written off loans that did not transfer to Firstmark, you should contact Discover for your statements and tax forms. You can call 1-800-211-9112 for assistance.
It is important to safeguard your account and personal information. Scammers may contact you claiming to be Discover or Capital One and ask for sensitive information. Remember that Discover will not contact you about these changes and ask for sensitive information such as your account number, password, or a one-time code. Always call Discover directly if you are unsure.
Discover recommends that you exhaust all your other options before you start looking for another private student loan lender. You should first look for scholarships and grants that you may be eligible for, such as through the FAFSA® (Free Application for Federal Student Aid). You can then see what federal student loans you have been offered. If you still need more money, you can consider a private student loan from another lender.
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No need to make payments during deferment, but interest still accrues
Discover no longer offers or services student loans and has transferred its student loan portfolio and the servicing of these loans to a third-party provider. If you have a student loan with Discover, don't worry – your loans and payments won't be affected for now, and you won't need to make payments during deferment. However, interest will still accrue during this time.
While Discover states that there is no need to make payments during the deferment period, it is important to remember that interest will continue to accrue. This means that even though you are not required to make any payments on your loan principal during this time, the interest on your loan will continue to accumulate, increasing the overall cost of your loan. This is a common feature of student loans, as it allows students to focus on their studies without the immediate burden of loan repayments. However, it is essential to be aware of the potential long-term costs of deferment.
The impact of interest accrual during deferment can be significant. For example, consider a student who takes out a $10,000 undergraduate loan with a fixed 6% interest rate. If this loan is deferred during their 45 months at school and for 6 months after graduation (the grace period), the interest will continue to accrue, increasing the total amount owed. Making even small monthly payments of $25 during this time can help offset the accruing interest and save you hundreds of dollars in the long run.
To mitigate the impact of interest accrual during deferment, there are several strategies you can consider. Firstly, you can explore making early payments on your loan while you are still in school. This can be done through part-time work, summer jobs, or by using gift money. Every dollar you pay during this period goes directly towards reducing the interest that accumulates. Additionally, you can look into scholarship opportunities, grants, and federal student loans, which may provide you with interest-free funding to reduce your overall loan burden.
While deferment can provide much-needed financial relief during your studies, it is important to understand the long-term implications of interest accrual. By being proactive and exploring alternative repayment and funding strategies, you can effectively manage your student loan debt and minimize the overall cost. Remember to review the terms and conditions of your loan and seek financial advice if needed to make informed decisions.
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Benefits of paying loans while in school
Discover® no longer offers or services student loans. However, here are some benefits of paying off loans while still in school.
Lower Total Loan Cost
Paying off your loan while in school can help you save money on your total loan cost. Student loans accrue interest all the time, so you could end up paying back substantially more than you initially borrowed. Even small payments can cut down on interest and prevent your balance from ballooning over the years.
Improved Credit Score
Making on-time payments is a great way to show lenders you're responsible and can boost your credit score. Credit is the ability to borrow money, based on the lender's belief that you can pay it back. If you don't have much of a credit history yet, paying your loans while in school can help build your credit score.
Less Debt After Graduation
Making a dent in your student loan balance with in-school payments can protect your future finances. You'll have less debt to deal with upon graduation, giving you more time to find a job you love or spend your income on other goals. You'll be prepared for your student loan bills after graduation since you've already been making payments.
More Manageable Post-School Payments
Paying off some of your loan while in school can make your post-school payments more manageable. By reducing your overall borrowing costs, you'll have smaller payments to make after graduation, which can ease the financial burden during that transitionary period.
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How to safeguard your account
Discover no longer offers or services student loans. The company merged with Capital One N.A. on May 18, 2025, and accounts were transferred to Firstmark in 2024.
- Be vigilant against scammers claiming to be Discover or Capital One who may contact you asking for sensitive information.
- Remember that Discover will not contact you about changes and ask you to provide sensitive information such as your account number, password, or a one-time code.
- If you ever doubt the legitimacy of a request, call Discover directly.
- Visit Discover's scam protection page for more tips on how to avoid scams.
- When visiting third-party websites, review their privacy and security policies, as well as their terms and conditions. Discover does not guarantee the accuracy of any financial tools available on external websites or their applicability to your circumstances.
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Frequently asked questions
Discover no longer offers or services student loans.
Discover stopped accepting new student loan applications after January 31, 2024. Applications received on or before this date were processed as usual.
All current loans will eventually be serviced by a third-party provider that has yet to be announced. You can continue to access your account through Firstmark Services or by calling 1-888-295-0910 for questions regarding payments, tax documents, and other loan-related documents.
Yes, you can make early payments on your Discover student loan at any time without prepayment fees. Making even small monthly payments while in school can help offset the interest that accrues and reduce your total loan cost.
