On my list of things that annoy me

[tsaiko]

I hate the Federal Student Aid's loan service for one very important reason. Their "electronic debit account" program. On the surface, it sounds like a good idea. set it up so that every month the FSA gets to withdraw money from your account and get a discount on the interest rate you have to pay. They get a guarantee that they'll get paid on time and you get to pay less interest. Everyone wins. So what is the issue?

The issue is that when you set it up, the only option is to make minimal payments. That's it. No other options. Which means that when you sign up, if that's all you do, it'll take you 10 years to pay off the loan and you'll have paid the maximum amount of interest possible and still meet the terms of your loan.

But wait! In the terms of the loan agreement, there is no penalty for paying off a loan early. Which leads me to the next frustration: trying to figure out how to give these people more money than I owe them. There's actually two different ways and both of them suck. First, I can remember to log in every month and send more money as a one-time payment. Yeah, that's not happening. Or you set up a recurring payment option with will deduct an additional amount from any account and apply it to the loan.

So why am I so annoyed?

Because these recurring payments can only last 6 months. That's right. After six months. And after that, you once again have to remember to log in and set up another recurring payment. Otherwise you default back to the minimum payment, maximum interest schedule.

It's so ridiculous. I mean, on one level, I understand. They want to get as much money from you as possible. On the other hand, this is terrible customer service. In order to give them the money I owe them, I have to set up two drafts from my bank accounts. Then I have to remember to go through this process again every six months. Why in the Hell can I not just increase the amount I pay them through their electronic debit account program?

The government. It makes no damn sense at all. -_-

Comments

[charisstoma.livejournal.com]

Can you set up with your bank to deduct that money from your account and put it in a savings account at hopefully higher interest than the loan. Then once a year you could make a large one-time payment from that savings account. You'd have to look into if there were fees involved from the bank to have an account like that.

And yeah, that's inconvenient to make so many hoops to get through to try and pay off a loan early.

[tsaiko.livejournal.com]

Alas, there is not an account out there with higher interest than what I'm paying on the loan (which honestly, isn't great, but isn't bad either). The best thing to do is just pay it down over time, since I'd pay less interest that way. I just find the whole thing ridiculously complicated and annoying.

[m-steelgrave.livejournal.com]

Man, I didn't know about the automatic withdrawal thing only making minimum payments. Boo.

I thought about that, but I am super-paranoid when it comes to automatic withdrawals from my accounts. I'd rather mark my calendar and take the time to do it each month.

[tsaiko.livejournal.com]

I check, double check, and triple check the first two to make sure that it's working and that the right amount is coming out. After that, I'm good. Yet they seem determined to make it impossible to just set it up and forget it for awhile.

[graymary.livejournal.com]

I AM GLAD TO KNOW THIS IN ADVANCE X(

[tsaiko.livejournal.com]

IF YOU NEED ANY SUGGESTIONS OR WANT INFORMATION, LET ME KNOW. I am willing to share. Just email me!