Paying Ahead

Benefits of paying ahead

There is no limit to the amount you may pay each month. By paying ahead of schedule or paying more than the monthly payment amount due, you:

Pay less interest over the life of the loan
Repay your loan earlier

To experience these benefits, you must continue to pay at least your regular payment amount every month regardless of the current amount due. If the current amount due is $0 and you decide not to pay, your loan may no longer be "paid ahead," and you may lose the associated benefits.

The bottom line? Pay more now to save more later.

How to get started

You can pay an additional amount at any time using the payment method of your choice.

We always apply additional payments to any interest that has accrued to date and then to your principal balance. But how this affects your next monthly payment depends on whether you use Direct Debit or not:

If you do not use Direct Debit: Your current amount due will be less than your regular monthly payment (the regular monthly payment amount minus the additional amount that you paid).
If you use Direct Debit: We withdraw your payment (plus any additional amount you request) through Direct Debit every month regardless of your "paid ahead" status.

Don't understand how this works? Read some examples:

Example	Explanation
Ann just got her tax refund and uses it to pay $300 toward her student loans. Ann's next billing statement shows $0 current due. Ann doesn't understand why she owes nothing, since she intended her $300 to go toward principal not her monthly payment.	If you pay more than your monthly payment amount, we apply the additional amount first to any outstanding interest and then to your principal balance. So your next bill may show that you owe nothing or only a partial payment.
Joe has us withdraw $100 through Direct Debit each month. In July, he gets a bonus at work and decides to pay online 2 weeks early. Joe is upset when he checks his bank statement and sees that we still withdrew his full payment amount this month, especially since he thought he already paid it.	Paying your monthly amount early (by telephone, mail, or online), before your payment is due, does not stop a Direct Debit transaction.
Elsa pays $20 extra on her student loans every month through Direct Debit. Her extra payments add up to where she is "paid ahead" by a full month, and her billing statement shows $0 current due. Assuming she doesn't have to pay this month, Elsa is shocked when we debit her account for the full amount plus the extra $20.	With Direct Debit, we withdraw your payment every month, plus any additional amount you request, regardless of what your billing statement shows.

Special considerations for Direct Debit users

To have us withdraw an additional amount from your checking or savings account every month, indicate the amount when you complete your Direct Debit application. We withdraw your payment through Direct Debit every month plus any additional amount you request, even if:

Your monthly payment amount changes.
You pay your monthly amount early (by telephone, mail, or online), before your payment is due.
You pay more than your monthly payment amount so your loan is in "paid ahead" status.

We prorate any additional amount we withdraw through Direct Debit across all loans with the same due date.

To make an additional payment on a specific loan, you must pay online. Or call one of our experienced counselors for information about paying by mail.

To change the amount we withdraw each month, write or email us with the change. (You must send the email from the email address we have on file for you.) You may send us this request at any time.

Learn more about Direct Debit.