Ask Jeni is brought to you in partnership with tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
How can I have the $100.00 my employer pays towards my student loan go directly to the principal? I make the full monthly payment.
Your best bet is to contact your loan servicer (whoever holds your student loans) directly, either through their website or via phone or email. Let your servicer know that you want all extra payments applied to principal rather than used to pay ahead. Some servicers (like Great Lakes) do this automatically unless a borrower indicates a custom allocation of their extra payment.
Typically, the payment will be applied to any accrued interest since your last payment, then the remainder to principal.
For example, if you made your required monthly payment 5/1 and the employer benefit payment was applied 5/7, your payment would first be applied to the six days of interest that accrued since your monthly payment was made. The remainder of your extra payment would be applied to principal.
Then, next month when you made your monthly payment on 6/1 you would only be paying 25 days of accrued interest before the remainder was applied to principal.
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