In referance to 34 CFR § 682.209(b)(2)(i)&(ii), borrowers are allowed to prepay the whole or any part of a loan at any time without penalty. Furthermore, after satisfying (b)(1), the borrower may make a request for payments exceeding the monthly payment amount to be applied as they deem fit.
Student loan lenders do not provide an electronic option for over-payments to be applied towards principal. In fact, most automatically post to the next payment ensuring maximum interest and term lengths.
In order to apply over-payments toward principal, written notice must be provided and, in some cases, must be provided every month.
We petition the government to require lenders to create electronic options for borrowers to request how over-payments should be applied.