If you have multiple loans, we first allocate the payment among your loans and then apply the payment to your Unpaid Fees, Unpaid Interest, and Unpaid Principal as described below.
Unless you provide special payment instructions,* the payment will be allocated first to loans with the oldest delinquency, prorated by the Past Due Amount for each loan by billing cycle. When all loans are at the same delinquency level, the payment will go to each loan in the Billing Group, prorated according to its Current Amount Due.
For residents of California, Colorado, Maine, New Jersey, New York, Rhode Island, and Virginia, your Underpayment will be allocated to satisfy as many individual loan payments as possible, first to loans with the oldest delinquency, in order from lowest to greatest Past Due Amount by billing cycle. Any remaining amount will be prorated across loans that share the same age of delinquency that have not yet been paid.
If the amount of your payment exceeds the Current Amount due but is less than the Total Payment Due, the remainder of your payment will be prorated based on any Unpaid Fees. With the exception of payments made by Auto Pay, once the Total Amount Due has been satisfied for all loans being paid, any Overpayment will be allocated to your loan with the highest interest rate. If you have more than one loan in the Billing Group with the same highest interest rate, then the Overpayment will be allocated to any unsubsidized loan(s) being paid, prorated according to the Monthly Payment Amount. If loans with the highest interest rate are all subsidized, then the payment will be allocated to those loans prorated by the Monthly Payment Amount. If none of your loans have a Monthly Payment Amount, we’ll prorate by Current Balance.
Payment application order:
Payments are applied based on the terms of each loan’s promissory note.
First, the payment is typically applied to Unpaid Fees.
Second, the payment is typically applied to Unpaid Interest. Keep in mind that interest accrues daily. If your payment is past due, you should anticipate that your loan will accrue more interest than when payments are made on time.
Third, the payment is applied to the Unpaid Principal.
If you have a FFELP loan in an Income-Based Repayment (IBR) plan, the payment goes first to Unpaid Interest, then to Unpaid Fees, and then to Unpaid Principal.
We will advance your payment due date by the number of full Monthly Payments that are covered by any Overpayment – unless you provide special payment instructions.* For loans with a 16-digit account number, unless your loans are repaid through Auto Pay, an Overpayment less than your next Monthly Payment Amount will reduce the amount of your next payment due.
Even when loans are paid ahead, your Auto Pay amount will always be equal to the Monthly Payment Amount or a greater amount that you may specify for each of your loans in Auto Pay.
View a payment example