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.
SoFi Private Student Loans
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