How Payments Are Applied

Interest accrues daily, and your payment is first applied to either outstanding interest or late fees, as shown below. Any remainder after interest and late fees are paid is applied to principal.

Income-Based Repayment Plan

1. Outstanding interest
2. Late fees
3. Principal

All Other Repayment Plans

1. Late fees
2. Outstanding interest
3. Principal

Late fees may be assessed when a payment is not received by the due date. Whether your loan is subject to late fees, fee amount and date it is assessed depends on loan type and owner.

A payment may be shown on your account transactional history and viewed through your online account one to two business days after it is received, but it will be treated as effective according to the guidelines below.

• The date the payment is received for mailed, dropped off or in-person payments. Postdated checks are not accepted.
• Effective dates provided with electronic, phone and online payments.
• Your due date for auto-debit payments.

The frequency of your payments can affect the amount of interest that accrues on your student loans. Student loans accrue interest on a daily basis. If more days pass between payments, more interest accrues and less of your payment is applied to principal.

Making payments before the due date

If your previous payment was received on your due date, and the next month's payment is received prior to the due date, less daily interest will have accrued than if you had waited until your due date to make the payment.

If you consistently make your payments fewer than 30 days apart, your account may pay off earlier than the final payoff date or maturity date, and you may pay less in overall interest.

Making payments on the due date

When your payments are effective on your due date every month, your loan will be paid in full by the end of its term.

Making payments after the due date

If your previous payment was received on your due date, and the next month's payment is received after the due date, more daily interest would have accrued than if you had made your payment on your due date.

Billing statements are created approximately 20 days before your next due date. If you make a late payment after your next statement is created, that statement will not reflect your recent payment.

If you continually make payments late and pay more interest than your repayment plan originally set forth, your monthly payment amount may increase so that your loan pays off within the term of the loan.

The amount of your payment in relation to the amount due affects future payments.

Overpayment (Paying more than the amount due)

You may pay more than your minimum monthly payment on your Aspire Servicing Center account at any time without penalty. Paying more than the minimum monthly payment amount or making extra monthly payments may save you money on interest.

Unless you direct otherwise, overpayments are applied in the following order:

1. To the loan with the highest interest rate.
2. Proportionately to any unsubsidized federal loans and any private education loans.
3. Proportionately across subsidized federal loans.

You may choose to allocate your payments in a different manner by submitting the Future Payment Allocation Form (PDF).

Underpayment (Paying less than the amount due)

If you are not able to pay the full amount due each month and make only a partial payment, the remaining amount will be considered past due and added to the amount due for the next billing period. If your account has multiple loans, partial payments will be allocated:

1. From the most delinquent to least delinquent.
2. To loans that will be reported as delinquent to the national consumer reporting agencies first.
3. To any loans that may accrue late fees.
4. To the loan with the least amount due to satisfy the monthly payment.
5. To any unsubsidized federal student loans or private education loans, starting with the loans with the highest balance, or if the balance on the loans is the same, to the loan with the oldest first disbursement date.
6. To subsidized federal loans, starting with the loans with the highest balance, or if the balance on the loans is the same, to the loan with the oldest first disbursement date.

You may choose to allocate your payments in a different manner by submitting the Future Payment Allocation Form (PDF).

Making no payment or skipping a payment

If you don't make a payment, your next billing statement will reflect the past due amount along with the current payment amount.

If you are unable to make your monthly payment, you may be able to delay a payment.

Aspire Servicing Center reports all borrower accounts to the national consumer reporting agencies every month and may report late or missing payments at 30 days or more past due. Even if you later bring your account current through payment or assistance, or even pay your account in full, that does not change previous, accurate credit reporting.

In addition, if you make partial payments, miss payments or pay late, more daily interest accrues on your account and you may incur late fees. Greater portions of your subsequent payments will apply to outstanding interest and late fees and less to principal. Over time, partial, missing or late payments can increase your loan balance through capitalization of accrued interest.

Without special instructions, payments are allocated to multiple loans in your account. You may allocate payments as you choose, but please consider paying at least the minimum monthly amount due for each loan to avoid delinquency.

You may allocate a one-time payment differently or you may provide allocation instructions for all future payments.

One-time special payment instructions should be submitted with the payment; provided via upload, fax or mail; or given to a representative while making a phone payment. Be sure to include your account number.

You may use the Future Payment Allocation Form (PDF) or log in to your online account to allocate all future payments.

Note: Regardless of any special handling instructions, all outstanding interest on the affected loans must be satisfied before funds may be applied to principal. Bill pay and auto-debit payments are automatically applied to your account, and each payment will then be reapplied according to your instructions.

You may pay more than your minimum monthly payment at any time without penalty. Your account may become paid ahead.

Sending an additional amount along with my required monthly payment

When you send an additional amount along with your required monthly payment, the additional amount will apply to principal as long as all outstanding interest and late fees have been satisfied.

Sending an additional amount separate from the required monthly payment

When you send an additional payment separate from your required monthly payment amount, your payment will apply to interest accrued from the date of your most recent payment, any late fees and then to your principal balance unless you request to allocate the payment differently.

Accounts are set up so that when you pay more than the required monthly payment, extra funds satisfy or pay a portion of one or more future bills, resulting in your account being paid ahead.

Note: Interest continues to accrue on student loans every day, even if your billing statement shows $0.00 or a reduced amount due. Continuing to make payments that at least cover interest will ensure that more of your next payment is applied to principal.

Satisfying future bills

If you have satisfied a portion or all of a future bill, your billing statement will reflect a reduced or $0.00 amount due, but it does not mean that the interest has stopped accruing. If you choose to not make a payment while paid ahead, your loan will not be considered past due, but the next payment you make will first be applied to the outstanding interest that has accrued since the last time you paid and then any remaining amount will be applied to the principal balance.

Removing the paid ahead status from your account

If you prefer to have your billing statement reflect the monthly installment due and not be applied to future bills, you may:

• Create or log in to your online account to manage paid-ahead status.
• Specify that you do not want overpayments credited to future bills in Section 3 on the Future Payment Allocation Form (PDF).
• Contact us.

You may allocate payments to only cosigned loans.

To make online payments to cosigned loans, create or log in to your online account.