Discover student loans: 2024 alternatives

Until Jan. 31, 2024, Discover offered an assortment of private loans with competitive rates to undergraduate and graduate students. Borrowers could also enjoy cash rewards for good grades, interest rate discounts, flexible repayment options and access to an online scholarship search tool. While the lender is no longer accepting applications, existing customers should continue making regular payments.

Alternatives to Discover student loans

Discover stood out for its seamless online application. If you are looking for other similar bank-backed student loan options, consider the following.

Sallie Mae

Sallie Mae is one of the most recognized lenders in the student loan space and stands out for its flexibility in enrollment and online resources. Like Discover, Sallie Mae offers funds for the total cost of attendance. The lender caters to those gaining their undergraduate or graduate degrees and offers loans to those with part-time course loads. A less favorable similarity between the lenders is that neither has extensive repayment terms — only 15 or 20 years for graduates and between 10 and 15 for undergrads.

Citizens Bank

Another strong contender for students looking to secure funding is Citizens Bank. The bank stands out for its customer service and is an excellent option for existing customers. Citizens have relatively similar rates to Sallie Mae’s, but it only offers funding for up to $350,000. If you prefer in-person support, however, Citizens has almost 2,000 branch locations across the country.

SoFi

Like Discover, SoFi operates entirely online and boasts the history of a large financial institution. It offers a range of member benefits, including rewards and access to deals and financial planning resources. SoFi has the same funding amount, from as little as $1,000 to the total cost of attendance. On top of that, SoFi, like Discover, does not charge any mandatory fees.

Why doesn’t Discover offer student loans?

According to the lenders’ website, Discover stopped accepting student loan applications on Jan. 31, 2024. In a press release, John Owen, Discover’s interim CEO and president, shared the following: “During a recent review, the Board determined that exploring the sale and transfer of servicing of Discover’s student loans is aligned with those priorities, better enabling Discover to focus on our core banking products, capitalize on our growth opportunities and deliver long-term shareholder value.” The sale agreement was announced in July of this year. The private student loan portfolio will be sold to a range of strategic partnerships comprising investment vehicles and accounts held by Carlyle and KKR. Current customers should continue to make payments and look for any communication directly from the lender. The company is committed to a seamless transition for active borrowers. Those looking to borrow from a lender like Discover should compare private student loan rates ahead of applying with another lender.