About 5 months ago, unbeknownst to me, my student loans were suddenly transfered to sallie mae. Since then I have been using Sallie Mae's website to make my student loan payments. The payment portal itself is fairly easy to use, however, it is very very confusing whether or not the extra amount that you pay is being applied to future payments or if it is coming off of the principle of the loan. Initially there was a button on the website that you could click on which would allow you to apply the extra payment to be applied to the principle, however, this button has now disapeared.
I have spoken with customer service and a number of occassions and they have assured me that anything extra that I pay will come off the principle of the loan and will not be applied to future payments. After reviewing my records (which are absolutely mind bogglingly hard to understand) I realized that the numbers were not working out. After further investigation I found out the following:
Based on my rate and my loan amount I pay a whopping $14 per day in interest. When I make my payment via their website, they have a policy to not apply my payment for 2-4 business days and the day that you make the payment DOES not count. Hence if you make a payment on Monday at 9 AM they do not count that as a business day so your payment will not clear till at least wednesday. Hence I am paying 3 days of additional interest or $42 in interest which will be deducted from my payment and not come off the principle.
This is actually a huge injustice since when I wake up on Tuesday my money has been taken out of my bank account and according to my bank it has already CLEARED. Hence, they are receiving the payment the next day but not applying it for at least another two days to gain additional interest. It is also interesting to note that they have an option to have you payment clear immediately from your loan for the small fee of $13.00. Hence if you want your payment to apply when it should apply they extort you for an additional $13.00.
I do believe this practice is very very very unethical and that sallie mae is making a ton of money in extra interest by doing this. This one might be ripe for a class action suit.