Discover stopped accepting new student loan applications in February 2024 and sold its portfolio due to severe, long-term regulatory compliance issues and costly servicing failures. Following CFPB consent orders in 2015 and 2020 regarding improper loan servicing, Discover decided to focus on core banking products. Existing loans are now handled by Firstmark Services.
As of Jan. 31, 2024, Discover is no longer accepting new student loan applications. Existing customers can still log in to track the status of their payments through the lender's servicing portal. Billing statements and tax documents will still be available in the Discover Student Loans Account Center until April 2025.
What Discover's exit means for your student loan. Discover's student loan business is changing. According to Discover's website, “Discover will no longer accept new student loan applications after January 31, 2024.
Discover Financial Services will sell a portfolio of private student loans to Carlyle and KKR for up to $10.8 billion, the credit card company announced last week. Firstmark Services, a division of Nelnet, will assume responsibility for servicing the portfolio upon the sale.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Closing Words. As of January 2025, Discover Student Loans is no longer in business and doesn't accept any new student loan applications. If you had previously borrowed money from them, you may continue your payments and manage your account through Firstmark Services.
The main controversy surrounding Discover (Discover Financial Services) involves its widespread, 17-year practice (2007-2023) of misclassifying millions of consumer credit cards as commercial cards, leading to over $1 billion in inflated interchange fees for merchants, prompting major FDIC/Federal Reserve penalties, restitution orders, and a significant class-action settlement. Other issues include regulatory scrutiny over consumer compliance, a lawsuit by a former executive alleging discrimination, and ongoing debates about higher merchant fees in general.
Whether you should pay off student loans early depends on your financial situation, but generally, it's good if you have a solid emergency fund, high-interest debt, and don't need federal loan benefits (like forgiveness); however, it's often better to prioritize an emergency fund, retirement savings, and other high-interest debts first, especially if you have federal loans that qualify for forgiveness programs. Paying early saves interest and lowers debt-to-income (DTI), helping with future loans like mortgages, but it reduces your cash liquidity and can cost you potential tax deductions or loan forgiveness, according to Bankrate and US News Money.
No credit score is required to apply for Discover Student credit cards. There's a 0% Introductory APR for your first 6 months. After that, an 16.49% to 25.49% Standard Variable Purchase APR will apply. There's a 0% Introductory APR for your first 6 months.
Yes, Discover offers second chances, primarily through their Discover it® Secured Card and hardship programs, allowing users to rebuild credit after financial setbacks like bankruptcy or past issues by demonstrating responsible use, with potential for upgrading to an unsecured card, but closed accounts can't be reopened.
Some reasons credit card companies may decline transactions are that your purchase exceeds your credit limit, or the purchase is in a location where you don't normally shop. If the credit card issuer declines your transaction, it's a good idea to call the number on the back of your card and find out why.
Discover Financial Services, Inc. U.S. Discover was acquired by Capital One on May 18, 2025. As a result of the acquisition, all Discover Financial brands would be offered as the Capital One brands and services.
Discover charges merchants more for card acceptance
While Visa and Mastercard charge around 2% per transaction, the Discover rate can be 1% more for a total of 3%.
Yes, student loan forgiveness continued in 2025 through existing programs like PSLF and Income-Driven Repayment (IDR) plans, but major changes occurred, with the SAVE plan facing a proposed end (pending court approval) and tax-free forgiveness ending December 31, 2025, meaning new discharges after that date could be taxable, creating uncertainty and urging borrowers to check their status on StudentAid.gov.