I make additional payments to my student loan every month (above my monthly required payments) whether it be through UPromise or out of my own pocket.  Historically, if I notified the student loan company in writing that I would like these additional payments to be applied 100% to principal, they would do it.  About 3 years ago, a different company bought my loan and they are unwilling to apply the overage payments strictly to principal.  They say they must apply it like they would any other monthly payment (split between interest and principal).  This makes no sense to me.  It’s my extra money!  Legally speaking, are they allowed to decide how my extra payments are applied?  With every other loan I hold, this is not the case.

I appreciate any feed back.  Thanks so much.

I don’t know, but the three that I’ve dealt with (Navient, Fedloan Servicing, Nelnet) dealt with overages the same. You can target which loan you want the overage to apply to, but if there is any interest on that loan it will always go to the interest portion first, and if there is no interest, it will go to principle. Since interest accrues daily, you should always expect a little bit of interest, unless you made a payment that same day. You can’t have your over payment go strictly to principal unless there is no interest remaining on that loan.

The rep may have been confused. I’ve always used the website to pay as it is very clear where your payments are going. I wouldn’t trust making a payment over the phone with most of those reps….