Direct Debit FAQ

Understanding Direct Debit

Can you automatically deduct my payments from my bank account every month?

Yes, we offer an automated payment service called Direct Debit. It's free, convenient, and you will qualify for a 0.25% interest rate reduction for using this service. Find out how to apply for Direct Debit.

What is Direct Debit?

Direct Debit is a free service where payments are automatically deducted from a specified bank account on the same date each month. It's not only convenient—you don't have to write a check or pay for a stamp—you also qualify for a 0.25% interest rate reduction when you use Direct Debit.

How does Direct Debit work?

You must apply for Direct Debit. If we approve your application, we will electronically transfer your monthly payment—along with any additional amount you request—from your bank account to your student loan account.

This automated transaction usually happens on the same date each month.

If your due date falls on a weekend or holiday, we will withdraw the payment from your bank account the following business day.

Why sign up for Direct Debit?

Direct Debit is the most convenient way to make student loan payments.

  • Save money. You qualify for a 0.25% interest rate reduction when you use Direct Debit.
  • Don't worry. Since we automatically withdraw your monthly payments from your bank account, they're never late (as long as the funds are available).
  • Save time. Your time is valuable. The transaction is automatic, so you won't need to write checks or sign in to Account Access every month to make your payments.

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Signing up for Direct Debit

Am I eligible?

You are eligible for Direct Debit if you have loans in repayment. Loans not currently in repayment are ineligible for this service until they have entered repayment.

Can I sign up for Direct Debit if I am past due on my loans?

Yes. When you sign the Direct Debit application, you also agree to allow us to cover your past due payments with a forbearance. When the Direct Debit service begins, your loans will be current.

How do I apply for Direct Debit?

Step 1 Sign in to Account Access.
Step 2 If eligible, click "Sign Up For Direct Debit"
Step 3 In order to eSign your Direct Debit application, you must create an account PIN. To do so, click "Yes, I want to create My Account PIN Now"
Step 4 After you create your PIN, you will be directed to the Direct Debit form. Input your bank account information and any additional amount you wish to have deducted each month.
Step 5 eSign your application with your PIN OR print, sign/date, and return your application to us for processing.

Once we process your Direct Debit application, we'll send you a letter to notify you of the results of your request.

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Getting Started

How will I know when my Direct Debit service begins?

We will send a notification that confirms the date and amount of your first Direct Debit payment. If you receive a monthly bill, your bill will also include a message informing you that the payment is scheduled to be withdrawn.

Will I still get a paper bill?

It depends.

If… Then…
All of your loans entered repayment before May 1, 2009 You will no longer receive a paper bill. However, you may sign up for Paperless Billing in your Account Profile settings.
Any of your loans entered repayment on or after May 1, 2009 You will continue to receive a paper account statement every month, unless you enroll in Paperless Billing.

Can I pay more than my monthly payment amount through Direct Debit?

Yes. There is no limit to the amount you can have us withdraw every month from your bank account. Just enter the additional amount when completing your Direct Debit application. We will continue to withdraw this additional amount even if there is a change to your scheduled monthly payment amount.

If your monthly installment amount is $0.00 (e.g., on an Income-Based Repayment plan), we will not withdraw the additional amount you may have requested.

If you would like to increase or decrease the additional amount that is withdrawn each month, you must complete a new Direct Direct Debit application.

NOTE: When you use Direct Debit, we prorate additional amounts across all loans with the same due date. To make an additional payment on a specific loan, you must pay online or mail your payment with instructions detailing which loans you would like the payment applied to.

Discover the benefits of paying ahead of schedule.

If I pay using another method, do you still withdraw a monthly payment through Direct Debit?

Yes. We will withdraw your payment (plus any additional amount you request) through Direct Debit every month, even if:

  • You pay your monthly amount (by telephone, mail, or online), before your payment is due.
  • You pay more than your monthly payment amount, resulting in a paid ahead status on your loan.

If you do not want us to withdraw your monthly payment for any reason, you must contact us via phone at least 3 business days prior to your due date to suspend your Direct Debit service. Even if we suspend your Direct Debit service, you must continue to pay every month using another method. In addition, you will not receive the 0.25% interest rate reduction during this time.

What if my due date falls on a weekend or holiday?

If your payment due date falls on a weekend or holiday, we will withdraw the payment from your bank account on the following business day.

What if the funds are not available on my due date?

Notify us immediately if your bank account will not have the available funds on your scheduled due date. Contact us via phone at least 3 business days before the scheduled transaction, as we may be able to temporarily suspend your Direct Debit service. Telephone is the quickest way to make your request. You will not receive the 0.25% interest rate reduction during this time.

If you do not ask us to suspend your Direct Debit service and your bank reports that there are insufficient funds, we'll make a second attempt to withdraw your monthly payment. If there are still insufficient funds when we make this second attempt, your loan will remain past due until we receive another form of payment. If your payment is returned due to insufficient funds for 3 consecutive months, your Direct Debit will be cancelled.

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Changes to Your Direct Debit Service

What happens to my Direct Debit if my payment amount changes?

If your payment amount ever changes, you will receive a letter with the new payment amount. We will automatically withdraw this new amount (plus any additional amount you have requested) from your bank account on your scheduled due date unless you notify us of your intent to postpone or discontinue Direct Debit.

What if my bank account information changes?

If your bank's routing number or your account number changes, you must submit a new Direct Debit application either online in Account Access or by mailing us a paper application PDF.

It's important you notify us, as we may need to suspend any pending transactions to prevent an attempt to debit from an inactive bank account. Contact us via phone for assistance at least 3 business days prior to your scheduled payment date.

NOTE: You will not receive the 0.25% interest rate reduction if your Direct Debit is suspended while your bank information is being updated. Direct Debit will not be active and you must make your payment using another method.

What if I want to change the additional amount I pay each month?

If you want to change the additional amount you requested to pay each month, please complete a new Direct Debit application.

We prorate any additional amount that you pay across all loans with the same due date. You cannot apply specific amounts to individual loans.

If you would like to make additional payments to individual loans, you may do so by making an online payment, or by mailing a payment and noting which loans you would like the payment applied to.

What happens to my Direct Debit if I request a deferment or forbearance?

To prevent an unwanted withdrawal while your deferment or forbearance request is being processed, contact us to suspend your Direct Debit service. We will automatically suspend your Direct Debit service once your deferment or forbearance is approved.

At the end of your deferment or forbearance, we will notify you that your Direct Debit service will resume on your regularly scheduled due date. You must notify us with a signed, written request, if you no longer want to participate in this service.

NOTE: You will not receive the 0.25% interest rate reduction during any period of deferment or forbearance.

If I have new loans that come into repayment, will they be included in my Direct Debit service?

No. You must complete a new Direct Debit application to include new loans. You can complete, sign, and return the application or eSign an application through Account Access.

How do I cancel or discontinue my Direct Debit service?

You must provide us with a signed, written request to cancel your Direct Debit service. This request can be faxed, mailed, or emailed.

Please allow up to 10 business days for us to process this request. If your due date falls within this processing window, contact us via phone at least 3 business days before the scheduled transaction, as we may be able to temporarily suspend your Direct Debit.

NOTE: The 0.25% interest rate reduction you received for using this service, will be removed once you discontinue Direct Debit.

What will happen if I am on Direct Debit and my final payment is less than my regular monthly withdrawal amount?

If your final payment is less than your regular monthly payment amount, the final debit will be adjusted to only withdraw the remaining amount due.

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