(applicable for variable interest rate loan applications submitted prior to May 1, 2014)
The Terms and Conditions have been updated effective February 2024.
These Terms and Conditions describe the eligibility and redemption policy for the Graduation Reward. "You" refers to the borrower. "We" refers to Discover® Bank.
You were eligible to receive a Graduation Reward if:
Upon graduation, if you had more than one participating loan, you may have been eligible to receive a Graduation Reward on each loan. However, you will not receive a Graduation Reward more than once for the same loan, even if you receive more than one degree. We may request proof of your graduation date and degree from you or your school to confirm eligibility for the Graduation Reward. If you defaulted on your loan or consolidated or refinanced your loan with another lender prior to redeeming the Graduation Reward, you will not be eligible for a Graduation Reward.
We will calculate the Graduation Reward by multiplying the outstanding principal balance of your loan on the last day of the month of graduation by 2% (0.02) and rounding to the nearest cent. The outstanding principal balance used for the calculation will not include accrued and unpaid interest on your loan on the last day of the month of your graduation, which may be capitalized when your loan enters its repayment period.
If there is an overpayment due to an error, we reserve the right to increase the principal balance of your loan by the amount of the overpayment of the Graduation Reward. It is your responsibility to notify us if there is an error in the Graduation Reward calculation or if you do not receive an expected Graduation Reward redemption.
This reward may have tax impacts. Rewards redeemed on or after January 1, 2018 will reduce the amount of interest we report on Form 1098-E (Student Loan Interest Statement) over the remaining life of your loan. In some instances, we may issue you a Form 1099-MISC for some or all of your reward amount, such as if you pay off the entirety of your loan before the end of your repayment term. We are not able to provide you with tax advice. If you have any questions, we encourage you to consult a tax advisor.
You must redeem your Graduation Reward in full in a single redemption transaction, and you may choose from one of the following options:
We will process your Graduation Reward within 90 days of your redemption request. Once reward redemption is requested, you will have 30 days to provide any requested documents before your reward request is closed.
These Terms and Conditions are subject to change without notice. We may change them at any time including, but not limited to, changing the redemption methods or imposing additional conditions.