Direct Debit FAQ


What is Direct Debit?

Direct Debit is our free automatic payment service for borrowers. After we approve your application, we will electronically transfer your monthly payment—along with any additional amount you request—from your checking or savings account to your student loan account. This automatic transaction happens on the same date each month.

Why sign up for Direct Debit?

Direct Debit is the easiest and most convenient way to pay your student loan.

  • No more late fees. Since we automatically withdraw your monthly payments from your bank account, they are never late (as long as the funds are available).
  • Save money. You don't need to purchase stamps and envelopes or pay for checks.
  • Save time. Your time is valuable. The transaction is automatic, so you can spend your time doing other things.
  • Help the environment. Going paperless saves trees.

Using this service may also qualify you for an interest rate reduction. Please contact us to find out if your lender offers this incentive.

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Am I eligible?

You are eligible for Direct Debit if:

  • Your loan(s) has entered repayment.
  • You receive a monthly installment bill.
  • Your loan(s) is delinquent less than 90 days.
  • You were not previously disqualified from using Direct Debit due to having insufficient funds.

Any loan(s) for which you currently receive interest notices or interest bills are not eligible for this service until they have entered repayment.

Can I sign up for Direct Debit if my loan is delinquent?

Yes, but only if your loans are less than 90 days delinquent. You should also make every effort to satisfy any outstanding payments before your Direct Debit service begins. Unsatisfied payments will continue to reflect a past due status, which will result in a poor credit rating, delinquency letters, and calls.

How do I apply?

To authorize Direct Debit service, complete the appropriate agreement form.

If your student loan account is in good standing: If your student loan account defaulted to PHEAA:
  1. Sign in to Account Access and select "Automatic Payments" on the left hand-side.

  2. Complete your Account PIN application.

  3. Complete the Direct Debit Electronic Funds Transfer Agreement process.

  1. Download and print the Direct Debit Default Collections Electronic Funds Transfer Agreement (PDF).

  2. Complete and sign the agreement form.

  3. Fax the form to:

    (717) 720-3644
    Attn: PHEAA Default Collections

    OR mail the form to:

    PHEAA Default Collections
    P.O. Box 8147
    Harrisburg, PA 17105-8147

How do I know when the service begins?

We will send you an approval letter after we process your agreement form. However, please be aware that this does not mean your Direct Debit will begin immediately. Your Direct Debit begins once you receive a monthly installment bill informing you that your first automatic payment is scheduled to be withdrawn. This will be your final paper bill.

Will I continue to receive my paper bill?

It depends.

If you entered repayment... Then...
Before July 1, 2009, You will not continue to receive a paper bill.
On or after July 1, 2009, You will continue to receive a paper account statement every month, unless you enroll in Paperless Billing.

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Terms and Conditions

Can I pay more than my payment amount?

Yes. There is no limit to the amount you may have withdrawn from your account monthly. When filling out the Direct Debit Electronic Funds Transfer Agreement online in Account Access, enter the additional amount as instructed. Please be aware that we will continue to withdraw this additional amount even if your installment amount changes.

If you want to change the additional amount you pay each month, please notify us in writing. We will accept changes to your payment amount via email only if you email us from the address we have on file.

We prorate any additional amount that you pay across all loans with the same due date. You cannot apply specific amounts to individual loans. You may continue making telephone and online payments in addition to the automatic payments you make through Direct Debit.

What if my payment amount changes?

If your payment amount ever changes, we will send a paper bill to notify you of the new payment amount. We will automatically withdraw this new amount (plus any additional amount you have requested) from your account on your scheduled due date unless you notify us of your intent to discontinue Direct Debit.

What if the funds are not available on my due date?

If your account will not have the available funds on your scheduled due date, notify us immediately. Contact us via telephone at least 3 business days before the transaction, as we may be able to temporarily suspend the service.

If you do not contact us and we attempt a withdrawal, your payment will remain outstanding until we receive another method of payment. We do not attempt a second debit from your account if the first is returned due to insufficient funds. Please be aware that repetitive occurrences of this type may result in termination of the service.

Please note: If you qualify for a Direct Debit interest rate reduction but your Direct Debit is suspended, you will not receive the discount for the month suspended.

What if my due date falls on a weekend or holiday?

If your due date falls on a weekend or holiday, we will withdraw the payment from your account the following business day.

What if my financial institution information changes?

If your bank account information changes, you must submit a new Direct Debit Electronic Funds Transfer Agreement online in Account Access. It is important you notify us, as we may need to suspend any pending transactions to prevent a debit from an inactive account. Contact us via telephone for assistance at least 3 business days prior to your scheduled payment date.

What if I request a deferment or forbearance?

If you receive a deferment or forbearance, we will suspend your Direct Debit service until your deferment or forbearance expires. At that time, we will send a paper bill to notify you when your automatic payments are to resume.

Please note: While your deferment or forbearance request is being processed, you may want to contact us to suspend your Direct Debit service to prevent an unwanted debit from your account.

What do I do if new loans come into repayment?

Complete and submit a new Direct Debit Electronic Funds Transfer Agreement online in Account Access for any new and/or consolidation loans.

How do I discontinue Direct Debit?

You must provide us with signed, written notification to cancel or discontinue Direct Debit. Please allow up to 10 business days for processing this request.

If your due date falls within this processing window, contact us via telephone at least 3 business days before the scheduled transaction, as we may be able to temporarily suspend your Direct Debit.

What will happen if I am on Direct Debit and my final payment is less than my regular monthly withdrawal amount?

If your final payment is less than your regular monthly withdrawal amount, this payment will be adjusted to only debit the remaining amount due.

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Account Access