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Can extra payments be applied to principal under IBR or REPAYE?


Total Posts: 3

Joined 2016-06-24




Can anyone point to where REPAYE and IBR require extra payments be applied to fees and interest before principal?  The service loan providers say this is mandated but I just don’t want to take their word for it.  I want to try to pay these loans as fast as possible and reduce the amount of interest that accrues with my extra payments.  Am I able to cite to a provision and push back?


Total Posts: 13

Joined 2015-02-16



It is in your Master Promissory Note that you signed to take out the loan. Mine says:
Generally, payments that you make or that someone else makes on your behalf will be applied first to late charges and collection costs that are due, then to interest that has not been paid, and finally to the principal amount of the loan. However, any payments made under the REPAYE Plan, the PAYE Plan, or the IBR Plan will be applied first to interest that is due, then to fees that are due, and then to the principal amount.

I’ve been writing letters to Congress, politicians, and news people for a few years now about the subject. Such a little change would help reduce the student loan debt as you have figured out yourself. The provider is right though, it is required to put the payment towards interest.