STUDENT NEWS

Discover Explores Selling Student Loan Business

By: Nancy Bilyeau · December 05, 2023 · Reading Time: 3 minutes

No New Discover Student Loans After January

Discover Financial Services announced it is exploring selling its private student loan portfolio, and transferring the servicing of existing loans to a third-party provider. The move would be part of the company’s effort to narrow its focus to core banking products.

Discover, a digital bank and payments services company, “will no longer accept new student loan applications after January 31, 2024. Applications received on or before January 31, 2024 will be processed as usual,” the company announced on its website on November 29.

Its board made the decision to explore the sale of its student loan business to better align with its corporate priorities, the company’s interim CEO and President, John Owen, said in a statement .

Should Discover find a buyer, borrowers will need to transition to a new lender, which usually means administrative changes while the payment amounts and terms of the loan are the same.

The portfolio, which includes only private student loans, is worth about $10 billion according to the company’s most recent earnings statement. Discover Financial Services acquired Citigroup-owned Student Loan Corporation in 2010.

What Happens If Your Loans Are Sold

As noted above, when a student loan is sold to another company, the original loan’s unpaid balance and interest rate are supposed to remain the same.

Borrowers should expect to receive some communication about the change. They may be asked to create a new account and update their payment information.

Typically, borrowers will receive an email or letter which details the new servicer’s name and contact information, transfer date, and possibly updated payment instructions for their repayment plan.

What You Need to Know If You’re Looking for a Student Loan

There are still options available for those looking for a private student loan. It’s important to look at the company offering the loans, as well as additional factors. For example, you should consider how much money you need to borrow, and whether you will need a cosigner. Then there are the terms of the loan, including the interest rate, length of loan, and any fees or penalties. And finally, you will deal with your lender from time to time, and you will want to feel supported by them. That’s why it’s also worth considering the strength of the company’s customer support.

Private student loans with SoFi have no fees, including no origination fees or late payment penalties.

View your rate


SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs: (https://www.sofi.com/faq)
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, visit: (https://www.SoFi.com/undergraduate-student-loans-rates/). SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS23120502

TLS 1.2 Encrypted
Equal Housing Lender