Discover announced on Monday new fixed and variable interest rates on new student loans—starting at 5.99 percent and 2.99 percent, respectively.
For applications submitted on or after June 1, fixed interest rates will start at 5.99 percent APR for undergraduate, health professions, residency, law and bar exam and MBA and graduate loans. Variable interest rates will be based on three month LIBOR and will start at 2.99 percent.
In addition, the company announced it will also offer students the option of making a fixed $25 monthly payment while enrolled in school or deferring payments while enrolled in school at least part-time.
“Discover Student Loans believes in the value of an education and recognizes that students and families are looking for affordable and easy-to-understand options when paying for college and graduate school,” Danny Ray, the president of Discover Student Loans, said. “Reducing our interest rates, introducing new repayment methods and providing additional cost-saving opportunities are just some of the ways we’re helping students and their families borrow responsibly.”
Additional options offered by Discover for students include a one percent cash reward for students who average a 3.0 grade point average, an interest rate reduction of 0.25 percent for students who enroll in automatic payments and an interest rate reduction of 0.25 percent on new loans for graduate students who took the GMAT exam within the past five years.