Should read this if your paying extra on your montly school loan payments

[Bigman38]

Just FYI so the loan company doesn't screw you over, it would have helped if I had this info earlier.

With my private student loans I've been paying extra on the monthly bill for awhile. Well after taking some time to look into my billing statement they have been taking the extra money and applying it towards future payments and not putting anything towards my principle.

When I sent in a large payment to the gov't for my Stafford loans I caught them ignoring my instructions to apply all of the payment to the smaller of my two loans, and they were splitting the payment in a way to guarantee the most possible interest from me.

Again just FYI for current students and people still paying off their loans, after asking around I know I wasn't the only person unaware of this. Student loan debt is hard enough to get out of without the loan company pulling this stuff.

[Cyclonepride]

Regents want to eliminate tuition set-aside for student aid within five years | TheGazette

You may also be happy to learn that 21% of that loan will only go to pay other student's tuition for the next five years, and then they'll cut that out.

[Rabbuk]

Wow they really jobbed you on that one. I bet most people would not even think to look. If they change it that will save you quite a bit i'd imagine.

[ripvdub]

I think most times you have to tell them you want it to go to principle. Same thing happens with my wifes car loan, but its a 0% loan, so no biggie. Thankfully I just paid off the last of my loans, a month or two ago, just now have my damn wifes grad school loans.

[CysRage]

Regents want to eliminate tuition set-aside for student aid within five years | TheGazette

You may also be happy to learn that 21% of that loan will only go to pay other student's tuition for the next five years, and then they'll cut that out.

So if you are in school right now (like me) you are basically screwed to pay the extra tuition that the students 5 years from now won't have to pay? What a joke. Current students should get part of their federal loans forgiven because of this.

[2ndCyCE]

So if you are in school right now (like me) you are basically screwed to pay the extra tuition that the students 5 years from now won't have to pay? What a joke. Current students should get part of their federal loans forgiven because of this.

As my dad told me when I was 5 years old as I was bellyaching about something trivial -- "Son, life's not fair." My disappointment was like getting socks for Christmas.

But he was right.

[Cyclonepride]

So if you are in school right now (like me) you are basically screwed to pay the extra tuition that the students 5 years from now won't have to pay? What a joke. Current students should get part of their federal loans forgiven because of this.

Yep. I'm curious if this could be the basis for a lawsuit.

[risiusj]

I noticed this too. I paid ~150% of a required payment. Next month, the required payment was about half size. I paid the same amount as the prior month. Then the next month the required payment was $0.00.

Good info to know.

[Rabbuk]

So if you talk to the lender can you get them to apply it to the principle or do they try to get out of doing that?

[cowgirl836]

Just FYI so the loan company doesn't screw you over, it would have helped if I had this info earlier.

With my private student loans I've been paying extra on the monthly bill for awhile. Well after taking some time to look into my billing statement they have been taking the extra money and applying it towards future payments and not putting anything towards my principle.

When I sent in a large payment to the gov't for my Stafford loans I caught them ignoring my instructions to apply all of the payment to the smaller of my two loans, and they were splitting the payment in a way to guarantee the most possible interest from me.

Again just FYI for current students and people still paying off their loans, after asking around I know I wasn't the only person unaware of this. Student loan debt is hard enough to get out of without the loan company pulling this stuff.

Did it still appear that your total amount was going down though? I ask because I pay well over my minimum, and I see each month that the total I owe on all my loans is going down. I rarely go in and look at where the money is going - but I think in the past I've seen that a portion goes to interest and a portion to principle....which now I think I need to clarify with them that I want that all on the principle.

[cowgirl836]

I noticed this too. I paid ~150% of a required payment. Next month, the required payment was about half size. I paid the same amount as the prior month. Then the next month the required payment was $0.00.

Good info to know.

ohhhhhhhhhh, ok, I think I understand this now - I have mine set up to autopay a specific amount each month. So even if they are applying it forward, it shouldn't matter. Because even if my required payment is $0, I'm still paying x per month.

[Bigman38]

Did it still appear that your total amount was going down though? I ask because I pay well over my minimum, and I see each month that the total I owe on all my loans is going down. I rarely go in and look at where the money is going - but I think in the past I've seen that a portion goes to interest and a portion to principle....which now I think I need to clarify with them that I want that all on the principle.

Yes the principle did appear to be going down, which is why it took me awhile to realize what was happening. I didn't do the math each month because I was assuming all extra went to principle.

[Bigman38]

So if you talk to the lender can you get them to apply it to the principle or do they try to get out of doing that?

I'll find out once I'm off work, pretty sure they will apply it how I want them too. But by talking to some other people the same thing happens on mortgages and auto loans too, and some of them won't let you put extra money towards principle.

[CySmitty]

Yeah the same thing happend to my wifes Iowa Student Loans. You can tell them to apply towards principal and they should. The other confusing thing is some of them will pay back a rebate of some of the origination fee if you pay them back early.