Important Announcements

Starting on July 1, 2026, the interest rate reduction for borrowers enrolled in auto pay will go from 0.25% to 1%. This reduction is available to borrowers with Direct Loans disbursed on or after July 1st, 2012. Visit StudentAid.gov to learn more and enroll by 11:59 p.m. ET on Sept. 30, 2026, to receive the temporary benefit through June 30, 2028.

On March 10, 2026, a court order ended the Saving on a Valuable Education (SAVE) Plan. The U.S. Department of Education will contact impacted borrowers, who can explore and apply for other repayment plans. For more information, visit StudentAid.gov/courtactions.

On Oct. 30, 2025, the U.S. Department of Education published final Public Service Loan Forgiveness (PSLF) program regulations that will be effective on July 1, 2026. We'll provide updates when the regulations are implemented. For now, there are no impacts to borrowers, payment counts, or discharges.

Visit StudentAid.gov/publicservice for more information about PSLF and current program requirements.

For more information about employer eligibility, visit StudentAid.gov/pslf/employer-search.

To apply for PSLF, use the PSLF Help Tool at StudentAid.gov/pslf.

Important Update

Repayment Plan Changes Starting July 1, 2026

The newest repayment plans—the Repayment Assistance Plan (RAP) and Tiered Standard Plan—are available effective July 1, 2026. Visit StudentAid.gov/bigupdates to learn more about these new repayment plans and other changes to the federal student aid programs. To apply, visit Studentaid.gov/repayment-calculator.

SAVE Plan is Ending

Borrowers who enrolled in or applied for the Saving on a Valuable Education (SAVE) Plan and have loans in forbearance must select a new repayment plan after receiving a notice from MOHELA. No need to call! For a quick and easy path to change plans or explore your options, log in to your Studentaid.gov account, and use the Repayment Calculator. For more information, visit our FAQ page.

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How Payments Are Applied

Payment Application and Allocation

Once a payment is made, the amount is allocated across the loans using the Standard Payment Application terms of the promissory note, unless you provide Payment Directions. Payments are allocated based on each Monthly Payment Amount. Any Past Due Amount is satisfied first, followed by the Current Amount Due. If there is no Monthly Payment Amount due and no Payment Directions on file, the payment is allocated to the loan with the highest interest rate and highest balance first. Payments are applied first toward Outstanding Accrued Interest, then to the Principal Balance.

Paying Extra (Overpayments)

Payments greater than the Total Amount Due can be made at any time without penalty. Unless you provide Overpayment Allocation Directions, overpayments will be applied as follows:

  • Any amount paid greater than the Total Amount Due will be allocated to the loan with the highest interest rate first.

  • If multiple loans have the same interest rate, the overpayment will be allocated to an unsubsidized loan first, then to a subsidized loan (if applicable).

  • If loans have the same interest rate and subsidy, the overpayment will be equally allocated to all loans in a repayment status.

  • Overpayments made to consolidated loans will automatically go to the unsubsidized portion of the loan.

Payments Made Within 120 Days of Disbursement (Loan Cancellation)

Unless instructed otherwise, in most cases payments made within 120 days of when your Direct Loan was disbursed (sent to the school) are applied as a reduction in the "Original Principal". You do not have to pay interest or loan fees on the portion of your loan that is returned within the timeframe described. We will retroactively change your "Original Principal" and adjust any interest and loan fees that apply to the amount of the loan that is returned. The payment source for these payments will show as "Principal Payment" in the payment details of the Payment History. These payments are made effective as of the loans' disbursement date. In addition, your "Original Principal" will be adjusted to reflect the amount originally disbursed less any amounts repaid in the first 120 days of the loan. Please note this excludes consolidation loans.

Payments Made During In-School Deferment More Than 120 Days After Disbursement

Payments received during in-school (more than 120 days after a disbursement), grace, deferment, and/or forbearance periods are applied to future installments only if your new monthly payment has been disclosed.

Payment Application and Allocation

Paying Ahead

Paying loans in full: Please visit your loan details page or contact us for a payoff amount.

Paying Ahead: Paying ahead means your Total Amount Due has been satisfied, and you have paid at least a portion of your future bill.

  • If you are on an income driven repayment (IDR) plan, the due date may be advanced to a maximum of 12 months. However, you cannot pay ahead past your IDR plan’s yearly renewal date. If your Monthly Payment Amount is $0, you cannot pay ahead or change your due date.

  • Any paid ahead status will be removed if you switch to a different repayment plan.

  • For consolidation loans serviced as multiple loans, the due date will only be advanced if both the unsubsidized and subsidized portions of the loan are eligible to be advanced.

Important Notes About Paying Ahead:

  • Working toward Public Service Loan Forgiveness? Paying extra won’t make you eligible to receive PSLF sooner. Learn more at StudentAid.gov/pslf   this link will open in a new window .

  • If you're on an IDR plan you may prepay, or make lump-sum payments, which first apply to any months during which you missed a payment and then would apply to future months up to your next income-driven payment (IDR) plan certification date or 12 months. If you were approved for $0 payments, you cannot pay ahead.

  • If you’re enrolled in the Repayment Assistance Program (RAP), you may pay ahead. However:

    • if you do, you will only receive interest subsidy and principal matching benefits for the month in which the payment was received.

    • you will not be eligible for interest subsidy and principal matching benefits during a month in which a payment is not made.

For example, the payment due date is January 15 and the payment which pays the loan ahead is effective on January 15. If there is eligibility for the interest subsidy or payment matching benefit, it would only be for the January 15 payment and not any future payments that were satisfied.

Payment Matching and Interest Subsidy When Enrolled in Repayment Assistance Plan (RAP)

Interest Subsidy:

  • For borrowers enrolled in RAP whose full, on-time monthly payment is less than the interest accrued for a month, the unpaid interest will be subsidized (not charged to the borrower).

  • This keeps the loan from negatively amortizing. Negative amortization occurs when loan payments are too low to cover interest due, causing unpaid interest to be added to the principal balance, which increases the total debt.

Matching Principal Payment:

  • If the borrower submits a full, on time monthly payment that reduces the total outstanding principal balance of all loans by less than $50, the borrower’s total outstanding principal balance will be reduced by:

    1. The lesser of $50 or the total monthly amount paid; minus

    2. the total amount of the payment that was applied to the outstanding principal balance.

  • A payment is considered on-time when the payment is made after the due date for the previous month and on or before the due date for the current month.

*Important: If you are enrolled in the Repayment Assistance Plan (RAP), you still have the option to make more frequent or additional payments at any time. However, borrowers who qualify for interest subsidy or principal matching benefits may not receive these benefits if they submit a payment that would satisfy future due dates. Learn more about this plan at https://studentaid.gov.   this link will open in a new window

Auto Pay

Your Auto Pay will continue to withdraw your regular amount due each month plus any additional recurring amount you have requested. This occurs even if:

  • Your monthly payment amount changes

  • You made a payment since your last due date

  • You made additional payments and are in a "paid ahead" status

You may set up or make changes to the additional recurring amount you want withdrawn using Auto Pay, and whether you want it to pay your account ahead. Log in, select “Payments & Billing,” then “Auto Pay” and complete the steps to modify your Auto Pay enrollment.

To target the additional recurring amount, see Submitting Payment Directions.

A partial payment is any payment that is less than the Total Amount Due. If you make a partial payment (e.g. a $75 payment with $100 due), it will be allocated as follows:

  • If multiple loans are current (not past due), the payment will first be allocated to the loan with the lowest Monthly Payment Amount. Once the Current Amount Due on that loan is satisfied, any remaining funds will be allocated to the loan with the next lowest Monthly Payment Amount, and so on.

  • If multiple loans have the same lowest Monthly Payment Amount, the payment will be allocated first to the loan with the highest interest rate, then to the loan with the next highest interest rate, and so on.

  • If multiple loans have the same lowest Monthly Payment Amount and the same interest rate, the payment will be allocated evenly between those loans.

  • If multiple loans are delinquent, your underpayment will be allocated to satisfy as many individual loan payments as possible. The payment would be allocated first to loans with the oldest delinquency, in order from lowest to greatest Past Due Amount.

Note: If you do not pay the Current Amount Due, your loans may become delinquent. If this happens, you may receive additional contact from MOHELA, be reported to consumer reporting agencies, and lose eligibility for borrower benefits.

SpecialPaymentInstructions

To submit payment directions when making an additional or partial payment, submit your request via:

  • Web – Log in to your online account, select "Make a Payment" and choose "Specify for Each Loan".

     Consolidation Loan: Targeting a payment to the subsidized or unsubsidized portion of the loan is not available online.

  • Phone – Contact customer service at 1-888-866-4352 (Toll Free).

  • Secure Message

  • Mail – Provide specific directions for how to allocate the payment and indicate this is a "one-time payment instruction". Submit your request via fax at 866-222-7060 or mail to:


    MOHELA
    633 Spirit Drive
    Chesterfield, MO 63005-1243

To never pay loans ahead when you make additional payments greater than the Total Amount Due, or to provide directions for how all future payments should be applied or allocated, submit your request via:

  • Web – Log in to your online account and navigate to your profile. Select "Edit Your Profile" and change your Payment Directions. To request that your payments to be allcoated to a specific loan or set of loans, submit your request by phone, Secure Message, or mail.

     Consolidation Loan: Targeting a payment to the subsidized or unsubsidized portion of the loan is not available online.

  • Phone – Contact customer service at 1-888-866-4352 (Toll Free).

  • Secure Message

  • Mail – Provide specific directions for how to allocate the payment and indicate this is a "payment direction for all future payments". Submit your recurring request via fax 866-222-7060 or mail to:

    MOHELA
    633 Spirit Drive
    Chesterfield, MO 63005-1243