Are there prepayment penalties on Stafford loans? | 05.26.09

Posted in Repayment By Student Loan Network Staff

A prepayment, as most of you know, is an amount in excess of the amount due on the loan. And like all other federal student loan payments, a prepayment will first be applied to any outstanding fees and charges, next to outstanding interest, and then finally to the principal balance of the loan(s).

There is NEVER a penalty for prepaying principal on any federal student loans.

Additional note: If you have more than one federal student loan with the same servicer, you must specify which loan you are prepaying down.

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2 Responses to “Are there prepayment penalties on Stafford loans?”

  1. An actual graduate says on February 19, 2012 at 9:33 am:

    As a major provider of loans, it’s pathetic that you cannot correctly distinguish between principle and principal.

    You should really proof your site.

    Reply To This Comment

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