Tips to Take the Stress out of Paying for College

As the search for student loans traditionally reaches its peak about this time of year, Discover Student Loans offers parents and students helpful advice when it comes to finding the right private student loan to pay for college.

Once parents and students have exhausted all sources of free money, such as scholarships and grants, and explored their federal loan options, they should consider private student loans to cover any remaining college expenses. With so many lenders and loan types out there, it is important to focus on a core set of features when shopping for the right loan.

Interest Rate: Most interest rates for private student loans will be variable, based on an Index (e.g., Prime, LIBOR) plus a margin. Interest rates will fluctuate with the market, so it’s important to find a loan with a low interest rate, as well as an interest rate cap to control the potential cost over the life of the loan. Parents and students should check to see if the advertised rate requires payments while in school or the option to defer payments while taking classes.

Loan Fees: Loan fees can add significantly to the overall cost of the loan, so parents and students should look for a loan with zero origination fees.

School Certification and Disbursement: When schools certify a private student loan, they are insuring the student’s loan amount corresponds to the cost of attending college less any other financial aid, which helps prevent over borrowing. When a loan is disbursed through the school, it helps to ensure tuition bills get paid on time, which is one less thing to worry about. The school sends the remaining funds to the student to cover living expenses.

Cosigners: Since private student loans are credit based and most college students do not have established credit history, adding a cosigner can increase the chances for loan approval and a lower interest rate. Cosigners can be family members or any adult willing to make loan payments if the student cannot.

Rewards: Simple and straightforward reward programs can end up saving money on the overall cost of the loan. Different lenders have different rewards. Parents and students should read the terms and conditions to understand how rewards work.

"Private student loans ease the stress of paying for college, especially for those students and their families who don’t qualify for enough in federal loans or public and private grants,” said Steve Olszewski, senior vice president of Discover Student Loans. "Our student loan specialists help parents and students understand their options and guide them step-by-step through the whole process.”

With Discover Student Loans, parents and students can borrow up to 100% of the cost of attendance with competitive rates, zero origination fees, and a 2% Graduation Reward that can be applied to the loan balance or received in cash. All loans are school certified, and Discover Student Loans is the only major lender that has student loan specialists available by phone seven days a week from 8 a.m. to midnight (ET). Parents and students can also apply for, track, and manage their loans anytime, as well as find helpful loan comparison and payment calculator tools at DiscoverStudentLoans.com.

Visit DiscoverStudentLoans.com or call 1-877-728-3030 to speak with a student loan specialist.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discoverfinancial.com.