Currently Navient is saying that Auto Pay amounts cannot exceed the minimum monthly payment due.

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I have a really hard time believing this is a technical issue, to me this sounds like a ploy to make more money: if the only way to pay more than the minimum is for the borrower to actually log in and make a payment manually then they are probably exponentially less likely to do so.

In the process they are not paying down the principal nearly as fast, resulting in the borrower being in debt longer and paying more interest.

What I don't know is if there are any laws governing federal loans and/or automatic payments that actually prevent Navient from offering more than the minimum automatic payments. Is there anything preventing Navient from offering this to its borrowers?

EDIT: My question specifically deals with the laws of the US, but if the policy is the same for other countries, answers are welcomed as well.

  • Questions of law are not on topic here. Suggest you rephrase if you can to something related to personal finance, otherwise you're likely to see this question closed. (You've specifically asked about "laws" here.)
    – user32479
    Jan 6 '16 at 22:06
  • And what happens when you schedule an autopay for some large amount, forget, and have an emergency. Your statements typically show the minimum due. I'm betting in this industry, they've run into so much truffle with this that is the smart decision not to or that capability.
    – iheanyi
    Mar 18 '17 at 14:04

I don't think there's any federal law prohibiting them from allowing you to AutoPay more than your minimum. Certainly there are federal laws telling them what to do with payments more than the minimum - they must apply the leftover to the principal by default - so the law doesn't assume you can't overpay.

However, federal law does require them to advance your next payment date if you overpay by a multiple of your minimum payment; i.e., if your payment is $50 and you send them $100, you don't have to make your next payment [though interest still accrues of course]. It's possible Navient isn't interested in implementing this functionality in their AutoPay, who knows.

In any event, assuming you have a bank that has AutoBillPay functionality, you may want to consider using that - either for the "extra" or for the whole amount (if Navient isn't giving you a discount for AutoPay - if so, use that at least). Your bank is happy to cut a check in any amount and send it on, and Navient is required to apply it to the principal. (Though if you do the autopay-and-billpay and are sending an extra amount less than a whole payment, verify that they're willing to accept amounts less than a full payment, first; not all lenders are.)

  • I have specifically used by bank's bill pay feature to pay $500/mo to Navient, because I was getting the same error as OP. My Navient payment was $288 a month and they wouldn't let me exceed that. Apr 22 '19 at 19:42

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