And my saga continues…
The problem with being so obsessed and analytical with my student loans is that every last detail is analyzed. My current struggle is that with FedLoanServing payment processing.
My giant loan of $490k has an interest rate of 7.375%. What this boils down to is that I’m literally paying $98 a day in interest. This is daily and compounding. So paying your payments early can save you a few dollars here and there. Unfortunately FedLoan Servicing does not process payments on the weekends. They also can take 3 or 4 full business days to process payments, and then even longer for the payment to post to your account. Its been 6 days since I made a payment and as I sit here and write this blog post I’m still waiting for it to post.
In my situation, if I made the payment when I had lets say $1200 in accrued interest since last payment I can calculate the interest being charged per day on this amount. Its about .42 cents. Then multiply by 5 days, thats about $2.10. Not even enough to buy a cup of Starbucks, I know. But over say 120 payments amounts to $242. But in the larger scale, imagine that FedLoan Servicing is managing repayment for thousands of thousands of students. They are collecting a few extra cents from every borrower for this huge delay in payment processing. Just another way the crooks will manage to squeeze out a few extra cents. As if charging 7.375% interest rate wasn’t enough. How about having a loan servicer who isn’t operating in the 1980’s and update their payment processing to allow for immediate online payments like the rest of modern day?
I did place a call to FedLoan Servicing and ask them about this glitch in the delayed payment processing and their response was that the computer “goes back in time” and gives you back that accrued interest. I’m not sure if I want to take the time out to really confirm this on my loans. In any case, our government hires these people to do one thing, service loans. The largest part of that is to accept payments. And your telling me they can’t accept weekend online payments and they take a week to process one payment? Just more evidence on how our student loan system is broken.
– Dr. J