Discover Financial Services›Discover Financial Services› offers Private Student Loans

Discover's historical credit performance compared favorably with Sallie Mae, although the reported measures differed. Its 2013 student-loan net charge-off rate was 1.3%, versus Sallie Mae's 2.3%; Discover measured losses against managed contractual receivables, while Sallie Mae used average receivables.

School certification and co-signed credit underwriting anchored Discover's lending model. In its 2014 briefing, the portfolio had an 85%–90% co-signer rate and an average higher borrower-or-co-signer FICO score of 740–750, with funds disbursed directly to schools.

Discover trailed Sallie Mae and Wells Fargo in historical private student-lending scale. In the 2012–2013 academic year, its 16% share of private student-loan disbursements was below Sallie Mae's 54% and Wells Fargo's 20%, leaving it third among those lenders.

Withdrawal ended the offering's usefulness as a borrowing or servicing option. Discover subsequently stopped offering and servicing student loans, so its former lending line could no longer meet either need for students and families.

Portfolio acquisitions and professional-degree expansion made student lending part of Discover's broader direct-banking business before the offering ended. The lending line began in 2007 and added student-loan portfolios in 2010–2011.

The product's final outcome was withdrawal from lending and servicing, rather than continued availability of the expanded loan line. Health-professions, law and MBA loans had launched in 2012; Discover subsequently stopped offering and servicing student loans.

Discover's Private Student Loans filled gaps beyond federal education funding for students and parents. The offering combined fixed- and variable-rate lending without origination fees; every borrower required school certification and proceeds went directly to schools.

Professional-degree coverage gave the loan line a broader role than undergraduate financing alone. Health-professions, law and MBA loans extended its reach into specialist study, but Discover subsequently stopped both offering and servicing student loans.