Payment Allocation

Allocation is how a payment is distributed across multiple loans. You can instruct us to allocate payments differently. Clearly write your instructions on a separate piece of paper included with your check. We cannot process instructions written on the check or remittance slip.

Payment Application

Once we allocate a payment or a portion of a payment to a specific loan or loans, that amount is applied based on the terms of each loan’s promissory note. Typically, it is applied first to Unpaid Fees, then to Unpaid Interest, and then to Unpaid Principal.

Overpayment

A payment received in excess of the Past Due Amount + Current Amount Due.

REMEMBER

If the payment doesn't satisfy the Total Payment Due, including past due amounts, a late fee may be assessed, and the amount of interest paid over the life of a loan will increase. Past Due Amounts may be reported to the consumer reporting agencies.

 
 

FFELP Loan Payments

Payments for FFELP, HEAL, and Private Loans owned by third-party lenders

Learn how payments are allocated and applied to accrued, unpaid interest, current principal balances, and any previously assessed fees, if applicable.


Single Loan – Your Account is Current

  • First, any previously assessed fees are paid.
  • Second, any accrued, unpaid interest is paid.
  • Third, the payment is applied to the current principal balance.
  • We will advance your payment due date by the number of full payments that are covered by any overpayment — unless you instruct us to do otherwise.*
  • View a payment example

Single Loan – Your Account is Past Due

  • First, any previously assessed fees are paid.
  • Second, any accrued, unpaid interest is paid. Interest continues to accrue on your account daily. If your payment is past due, more of it will be applied to the interest that has accrued.
  • Third, the payment is applied to the current principal balance.
  • We will advance your payment due date by the number of full payments that are covered by any overpayment — unless you instruct us to do otherwise.*
  • View a payment example

Multiple Loans in a Group – Your Account is Current

When you have multiple payments for similar loan types, we may group them together in a "billing group" so you will receive one consolidated statement and can make one payment to cover them all.

You may request that your loans be ungrouped so that you receive separate statements by calling us at 800-722-1300.

  • The payment is allocated based on the current amount due for each loan in the billing group — unless your payment is mailed with a separate piece of paper instructing us to do otherwise.
  • Once a portion of the payment is allocated to each loan, we apply it in the following manner:
    • First, any previously assessed fees are paid.
    • Second, any accrued, unpaid interest is paid.
    • Third, the payment is applied to the current principal balance.
    • We will advance your payment due date by the number of full payments that are covered by any overpayment — unless you instruct us to do otherwise.*
  • If a monthly payment amount has not been established (for example, if your loans aren't yet in repayment), your payment will be allocated among all of your loans on a prorated basis, first to each loan's outstanding interest and then to the principal.
  • View a payment example

Multiple Loans in a Group – Your Account is Past Due

  • Unless your payment is mailed with a separate piece of paper instructing us to do otherwise, the payment first will be allocated based on each loan's past due amount.
  • Once the past due amounts have been covered, the rest of the payment is allocated based on the current amount due for each loan in the billing group.
  • Once a portion of the payment is allocated to each loan, we apply it in the following manner:
    • First, any previously assessed fees are paid.
    • Second, any accrued, unpaid interest is paid. Interest continues to accrue on your account daily. If your payment is past due, more of it will be applied to the interest that has accrued.
    • Third, the payment is applied to the current principal balance.
    • We will advance your payment due date by the number of full payments that are covered by any overpayment — unless you instruct us to do otherwise.*
  • View a payment example

Request Special Payment Allocations

You may direct how your payments are allocated among your loans by mailing your check with a separate piece of paper providing us with your allocation instructions.



*How to Send Overpayment Application Instructions

  • Online: You will be able to choose whether you want any overpayment applied toward future payments to advance your next payment due date.
  • By check: Enclose your instructions, along with your account number, on a separate piece of paper included with your check.