So I'm at the point in my life when I'm trying to tackle my student loan debt. Prior to the past few months I've been making my required student loan payments to Sallie Mae and always added a few extra dollars (not a whole lot). I have been paying these loans since 2006.
I started doubling my payments when I can and sending an extra $100 here and an extra $200 there in hopes of lowering my principal as quickly as possible. So after a few months of this I went on Sallie Mae's website to view my progress. I was specifically looking to see how much my principal had decreased. I discovered that my principal had barely gone down.
I dug deeper on their website and looked through the history of my payments and how they were applied. What Sallie Mae was doing was applying my payments to daily interest accrued (they accrue your interest daily), applying some to principal and pushing out my payment due date based on the amount paid.
By pushing out the payment due date Sallie Mae gets to collect more money from interest. They calculate the interest charge based on your outstanding principal amount. If they push out the due date, they do not have to apply as much of your payment to principal, thus increasing the amount of interest they charge.
I called Sallie Mae and asked how I can stop this (pushing out the due date). They told me that I have to put a note in with my payment telling them to apply the extra payment to principal. I did this and it didn't work.
I called again and spoke to several people and finally they told me that they adjusted my loan to not extend the due date. This worked for one month. Just the other day, I sent an extra $350 (via their website, to be automatically debited from my checking account) and again, they pushed out the due date.
I called again and was told that my request to fix this was being sent to another department. I asked to speak to this department but was told I could not because they weren't in.
The sad thing about this situation is I'm doing my part to try to pay them back, but Sallie Mae is making it very difficult with their repayment scenarios that only benefit their bottom line. I'll be interested in seeing if others have had the same issue with Sallie Mae.
If you're getting ready to take out student loans, I'd stay away from Sallie Mae.
0 comments