Payment Processing Information
Payment Application
Payment application is the way payments are applied to individual loans. See Overpayments and Underpayments below for information on how payments are allocated when you have multiple loans and are paying more or less than the amount due.
Payments are applied to loans in one of two ways generally based on the terms of your loan agreement:
- Accrued interest > Late fee (if applicable) > Current principal balance
- Late fee (if applicable) > Accrued interest > Current principal balance
In some cases, the order of application is based on your repayment plan. For Federal Family Education Loan Program (FFELP) loans on an Income-Based Repayment (IBR) plan, payments are applied first to accrued interest, then to late fees (if applicable), and then to the current principal balance.
Because interest accrues daily, the portion of your payment that is applied to interest, rather than to principal, depends on the number of days since your last payment.
Review a past payment:
- Sign in to Account Access and select "Payment History"
- Under the "Payment and Billing" tab on the left-hand side
- Choose the payment you would like to review and select "View Details" to see how much applied to interest and principal
Paying more than the
Total Due
Make sure we receive your payment by this date so it can be posted to your account on time.
If you do not provide instructions for your overpayment (see Paying Specific Loans below), it will be allocated in the following manner:
- To the loans with the highest interest rate. This applies even if you are on an Income-Based Repayment plan with a lower payment amount or even a $0 required payment amount.
- If more than one loan has the same highest interest rate, the overpayment will go to any unsubsidized or private loan with the highest interest rate.
- If there is more than one unsubsidized or private loan with the same highest interest rate, the overpayment will be allocated proportionallyacross such loans based on loan balance.
Proportionally
An amount related to part of a whole number. Example: If you have 5 loans for $1,000 each, your total balance is $5,000. Then one loan is 20% of the total portion of your loan balance.
- If there are no unsubsidized loans with the highest interest rate, the overpayment will be allocated to subsidized loans with the same highest interest rate proportionally based on the loan balance.
Still have questions? Review the payment processing examples for making overpayments.
If you do not provide instructions for your payment that is less than the Total Due for all loans (see Paying Specific Loans below), your payment will be allocated to your loans in the order of most delinquent to least delinquent. This is intended to reduce the delinquency on your loans to minimize the possibility of default and other consequences.
When all loans on your bill are at the same level of delinquency and your payment is not sufficient to satisfy the total amount due, your payment will be allocated to satisfy individual loans in the following order:
- To the loans for which delinquency will be credit reported the soonest
- Then to loans that may be assessed late fees
- Then to loans in order of lowest amount due to highest
- If the required payment amounts are the same, the payment will be allocated in the following order:
- Highest interest rate
- Unsubsidized or private education loan
- Highest balance
- Oldest first disbursement date
- If more than one loan exists, the amount will be prorated
- If there are no unsubsidized loans the payment will be allocated to the subsidized loans in the same order
If you do not satisfy the total amount due, your account will remain past due. However, if you are able to make partial payments that satisfy past due bills, you may be able to reduce the level of delinquency (number of days past due) of your loans. These partial payments can help prevent default and other consequences of delinquency.
It is important to make your payments on time each month, so your loan doesn't become delinquent. Delinquent loans are at risk for credit reporting. If you can't afford to make a payment or your account is already past due, we may be able to help you!
Still have questions? Review the payment processing examples for making underpayments.
When you pay more or less than the amount due on your loans, you may choose to specify payment amounts to each loan. The easiest way to make payments on specific loans is to pay online using Account Access or our mobile application.
If you sign up for Direct Debit, you also specify any additional amounts to your individual loans. You can modify this Direct Debit selection at any time through Account Access.
If you need help making payments on specific loans, you can also call us for assistance and a representative will be happy to guide you through the process.
Standing Payment Instructions
Standing Payment Instructions allow you to provide instructions on how you would like to allocate any future over and under payments, regardless of payment method, unless alternate instructions are provided for an individual payment.
Standing overpayment instructions will be used when a payment is received without instructions that is more than the amount due. Our website provides all the selections possible, which include options like highest interest rate loan or a percentage to specific loans of your choice.
- Standing Payment Instructions for overpayments will look at each payment based on the criteria you selected to determine the loan that best matches.
- When you have a loan that no longer matches the criteria (for example no more unsubsidized or private education loans), then your account will be reviewed for similar criteria but for subsidized loans.
- If you select a percentage and then pay off one or more of the loans, the allocation will recalculate based on the remaining loans you selected.
Standing underpayment instructions will be used when a payment is received without instructions that is not enough to satisfy the amount due. Your payment will first be allocated to pay as many outstanding bills in full as possible, until an outstanding bill is reached that cannot be fully satisfied, then the instructions are used to allocate the payment.
- Standing Payment Instructions for underpayments is not recommended. The system default allocation of your payments used by AES, the servicer of your ELFI loan, is performed in a manner that targets loans that will be credit reported the soonest. By selecting an underpayment instruction, credit reporting will not be reviewed for payment allocation. Please be mindful of your underpayment selection and how it may affect your student loans.
- When you have a loan that no longer matches the criteria (for example no more unsubsidized or private education loans), then your account will be reviewed for similar criteria but for subsidized loans.
- If you selected the late fee option and it satisfies the amount due on your loans with late fees, any remaining will be allocated as described above in the underpayment section.
When more than one loan matches the criteria for Standing Payment Instructions the payment will be prorated.
Still have questions? Review the Standing Payment Instruction Options for over and underpayments
Ways to Provide Instructions
- Standing Payment Instructions – The easiest way is to sign up through Account Access.
- If you have subsidized and unsubsidized portions of a federal consolidation loan and you would like the funds allocated in a specific manner, you may want to set up Standing Payment Instructions while on Direct Debit. Please contact us so we can discuss the process to request this.
- One-time instructions -The easiest way is to send us an email but feel free to contact us by faxing or mailing instructions.
By Email
Sign in to Account Access and to send us your instructions through a secure message.
By Mail
Send your written instructions to us at our correspondence address:
American Education Services
P.O. Box 2461
Harrisburg, PA 17105-2461
Please send your instructions separately from any payment, check, or money order to ensure your payments apply correctly as you are requesting. Do not write instructions directly on your check, money order, or bill stub so that it isn't missed when we process your payment!
By Fax
Fax instructions to (717) 720-3916.
What to Include in Payment Instructions
Include the following information when providing payment instructions:
- Your account number
- Identification of the applicable loans using the disbursement date and loan type which you can find in Account Access or on your bill
- Specific details on how to allocate your payment to specific loans. If your instructions are not clear, we will contact you. We cannot honor requests to modify the manner in which payments are applied, as this is governed by the terms of your loan agreement or your repayment plan (see Payment Application section above)
If you need help with this process, please contact us.
Modifications to Prior Payments
You may contact us if you would like to request a change to the manner in which a prior payment was allocated to your multiple loans.
Paid Ahead
You may pay more than your total due, using the payment method of your choice. When you pay more, your account may reflect a paid ahead or partially paid ahead status, based on your loan agreement.
Benefits of paying ahead
By paying more than the total due, you:
- Pay less interest over the life of your loan
- Repay your loan earlier
To experience these benefits listed above you can continue to pay every month regardless of the current amount due. If you decide not to pay, you may lose the associated benefits listed above.
The bottom line? Pay more now to save more later on your loan!
What will my bill look like if I am in paid ahead status? Can I continue to make payments?
- If you satisfy a full future installment, your total amount due may reflect $0 on your next monthly bill. If you receive a bill for $0 amount due, it may benefit you to continue to pay since interest continues to accrue. It may be necessary to continue to pay the full Monthly Payment amount when your loans are paid ahead in order to qualify for benefit programs, such as reduced interest rates or cosigner release, that may be offered by your lender.
EXCEPTION: If you are billed for $0 under the Income-Based Repayment plan or are on a reduced payment forbearance, payments will not satisfy future installments. - If you satisfy a portion of a future installment, the total amount due on your next monthly bill will be the difference.
For example: If your bill is normally $150 and you are paid ahead by $50, your statement may reflect an amount due of $100
How will my payments be applied to my loan balance if I am in paid ahead status?
- When you make a payment that is more than the total amount due for all loans, the amount of the overpayment is allocatedto the highest interest rate loan(s). Learn more about how we allocate your payments.
Allocated
Payment allocation is the determination of the amount that should be prorated to each loan.
- Regardless of your account being paid ahead or not, your over payment will be applied to your principal balance after satisfying accrued interest and late fees (if applicable).
- For private loans, if your lender allows for paid ahead status, the overpayment will go towards satisfying a future bill. To find out if paid ahead status applies to your private loans, see your Credit Agreement or contact us.
How to Opt Out of Paid Ahead
Overpayments may result in a paid ahead status. If you do not want overpayments to be applied to future bills, the easiest way is to sign in to Account Access to make your selection. However, you can also contact us to opt out of paid ahead status. You can email us through your online account or call us at 1-866-763-6349.