Is there any way I can change my MPN?

Question

I was talking to my parents about paying my loan off during school, if I had extra money.

During my electronic MPN signing process, I accidentally chose "I wish to pay interest during school", absent-mindedly confusing "pay back interest" with "pay back the loan itself". Sallie Mae's website isn't helping at all, it's not that user-friendly and says nothing about changes like this.

Calling them isn't helping much, either. There are no options from Sallie Mae about changing anything on the loan; when I call them all I get is options for Guarantors, cosigners, representatives, and the like.

Is there any way I can do this?

Answer 1

Is this a private loan or federal loan? If it is  a federal loan, after 30 days of the interest being unpaid, the option would automatically change from you wanting to pay the interest while inschool to not wanting to pay the interest. You would receive interest notices every 6 months instead of intereset bills every 1-3 months. That is a federal regulation so no matter who you're loan is with, this is the way that it will work. If the loan is subsidized, the govenment will be paying your interest, so it doesn't even matter. Now, if you had applied for a private loan, you would not be able to change the option probably until after so many timely payments. If you completed your application online, they should have a way for the application to be deleted so you can resign the application. When you call, you want to get in contact with technical support and let them know that you selected the wrong option on your application and want it deleted so you can resign it, or that you would like them to change it for you. You shouldn't be listening for options about changing something on a loan. If anything, you'll want to speak to a rep or check status of the loan, or something along those lines to speak to a rep in the department for loan origination. Hope this helps you out! And also, just a little note to help you also, most of the time, once an application is signed, it may take 2-3 days for it to show on their system, so you may want to wait until Monday to call them back. As long as the loan is not disbursed, you should still be able to change the option.

Answer 2

With very few exceptions, educational loans do NOT have a pre-payment penalty. This means that you are free to make unscheduled payments of any amount (right up to paying off the loan).

The fact that you checked the "I'll pay the interest" box put you on the hook to make an interest payment every month, but it did not affect your ability to send Sallie Mae a nice, big check any time you feel like it.

You don't need to make any changes to your promissory note to make occasional non-scheduled payments. I think if you read your note thoroughly, you'll find the section that explains that the loan does not have a pre-payment penalty clause.

As an example, here is the relevant section from the Master Promissory Note that all Stafford lenders use:

"I may prepay all or any part of the unpaid balance on my loans at any time without penalty. If I do not specify which loans I am prepaying, the lender will determine how to apply the prepayment in accordance with the Act."

All of this information should also be reflected in the additional information that your lender was required to provide you - the one called "Borrower's Rights and Responsibilities":

"There will be no penalty for prepaying any portion of

my loans."

I hope that helped - good luck!