Gary and Carol Dimm decided to gift their children money as long as it went to student loans, specifically the principal amount. They found that their servicer would not simply use that money to pay down the balance of the loan.
In a letter written to Lancaster Online, the parents of two college graduates felt compelled to warn the wider audience of loan servicer shortcomings. The loans that their children have are the federal student loans taken out from Federal Student Aid, or FSA, which you can fill out for free.
Their issue became apparent this past Christmas. Gary and Carol Dimm decided to gift their children money as long as it went to student loans, specifically the principal amount. The only problem is that they attempted to pay the money through their servicer’s web portal. Unfortunately, they found that their servicer would not simply use that money to pay down the balance of the loan. Instead, it was applied to credits that the students would use to pay off their monthly loan payments.
The Dimm Family figured the only solution would be to mail a check to the loan servicing company along with a letter that said to apply the extra money to the principal loan. Though they admitted they haven’t seen results yet.
Always check up on your finances, especially when dealing with student loans. There are a lot of little things that could go wrong and cause a larger problem. The Dimm family mentioned they don’t like living in debt and work hard to pay it off sooner. They also wrote that they hope their letter helps anyone else who is attempting to, current in, or graduated and dealing with student loans from a firsthand account of how loan servicers might not stand by you and your intent.
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