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Payment Processing Information

Payment Application

Payment application is the way payments are applied to individual loans. See Overpayments and Underpayments below for information on how payments are allocated when you have multiple loans and are paying more or less than the amount due.

Payments are applied to loans in one of two ways generally based on the terms of your loan agreement:

  • Accrued interest > Late fee (if applicable) > Current principal balance
  • Late fee (if applicable) > Accrued interest > Current principal balance

In some cases, the order of application is based on your repayment plan. For Federal Family Education Loan Program (FFELP) loans on an Income-Based Repayment (IBR) plan, payments are applied first to accrued interest, then to late fees (if applicable), and then to the current principal balance. You may sign in to Account Access to review your loan types and repayment plans.

Because interest accrues daily, the portion of your payment that is applied to interest, rather than to principal, depends on the number of days since your last payment. Learn more about interest.

To review a past payment, sign in to Account Access and select "Payment History" under the "Payment and Billing" tab on the left-hand side. Choose the payment you would like to review and select "View Details" to see how much applied to interest and principal.

Overpayments

Paying more than the Total Due on your loans may reduce the amount of interest you will pay over time, saving you money in the long run.

If you do not provide instructions for your overpayment (see Paying Specific Loans below), it will be allocated in the following manner:

  • To the loans with the highest interest rate. This applies even if you are on an Income-Based Repayment plan with a lower payment amount or even a $0 required payment amount.
    • If more than one loan has the same highest interest rate, the overpayment will go to any unsubsidized or private loan with the highest interest rate.
      • If there is more than one unsubsidized or private loan with the same highest interest rate, the overpayment will be allocated proportionally across such loans based on loan balance.
    • If there are no unsubsidized loans with the highest interest rate, the overpayment will be allocated to subsidized loans with the same highest interest rate proportionally based on the loan balance.

Still have questions? Review the payment processing examples for making overpayments.

Underpayments

If you do not provide instructions for your payment that is less than the Total Due for all loans (see Paying Specific Loans below), your payment will be allocated to your loans in the order of most delinquent to least delinquent. This is intended to reduce the delinquency on your loans to minimize the possibility of default and other consequences.

When all loans on your bill are at the same level of delinquency and your payment is not sufficient to satisfy the total amount due, your payment will be allocated to satisfy individual loans in the following order:

  • To the loans for which delinquency will be credit reported the soonest;
  • Then to loans that may be assessed late fees;
  • Then to loans in order of lowest amount due to highest;
    • If the required payment amounts are the same, the payment will be allocated in the following order:
      • Highest interest rate
      • Unsubsidized or private education loan
      • Highest balance
      • Oldest first disbursement date
      • If more than one loan exists, the amount will be prorated
      • If there are no unsubsidized loans the payment will be allocated to the subsidized loans in the same order.

If you do not satisfy the total amount due, your account will remain past due. However, if you are able to make partial payments that satisfy past due bills, you may be able to reduce the level of delinquency (number of days past due) of your loans. These partial payments can help prevent default and other consequences of delinquency.

It is important to make your payments on time each month, so your loan doesn't become delinquent. Delinquent loans are at risk for credit reporting. If you can't afford to make a payment or your account is already past due, we may be able to help you!

Still have questions? Review the payment processing examples for making underpayments.

Paying Specific Loans

When you pay more or less than the amount due on your loans, you may choose to specify payment amounts to each loan. The easiest way to make payments on specific loans is to pay online using Account Access or our mobile application.

If you sign up for Direct Debit, you also specify any additional amounts to your individual loans. You can modify this Direct Debit selection at any time through Account Access.

If you need help making payments on specific loans, you can also call us for assistance and a representative will be happy to guide you through the process.

NOTE: Instructions can also be provided for one-time and future payments by following the instructions below under Ways to Provide Instructions and What to Include in Payment Instructions. Because you are asked to confirm or provide instructions for one-time payments made online, using the mobile application, or over the phone, it is not necessary to provide separate or standing instructions for such payments.

Ways to Provide Instructions

Standing instructions must be provided in writing. You may call us to provide instructions for one-time payments. To send us your standing instructions in writing, use one of these methods:

Contact Method Contact Details
By email

Sign in to Account Access and use the Contact Us link to send us your instructions through a secure message.

By mail

Send your written instructions to us at our correspondence address:
American Education Services
P.O. Box 2461
Harrisburg, PA 17105-2461

Please send your instructions separately from any payment, check, or money order to ensure your payments apply correctly as you are requesting. Do not write instructions directly on your check, money order, or bill stub so that it isn’t missed when we process your payment!

By fax

Fax standing instructions to (717) 720-3916.

What to Include in Payment Instructions

Include the following information when providing payment instructions:

  • Your account number.
  • Identification of the applicable loans using the disbursement date and loan type which you can find in Account Access or on your bill.
  • Specific details on how to allocate your payment to specific loans. If your instructions are not clear, we will contact you. We cannot honor requests to modify the manner in which payments are applied, as this is governed by the terms of your loan agreement or your repayment plan (see Payment Application section above).

If you need help with this process, please contact us. You can also see an example of what you may want to include with your request by reviewing the Consumer Financial Protection Bureau's sample letter about providing such instructions.

Modifications to Prior Payments

You may contact us if you would like to request a change to the manner in which a prior payment was allocated to your multiple loans.

Debt Management

Is paying more on your student loan your best option? For more information on the most effective ways to pay down debt, budgeting, and your student loans—visit YouCanDealWithIt.com