Woman shares student loan payment hack as payments resume

@lexlivinglavida1/TikTok ShutterstockProfessional/ShutterStock (Licensed)

Woman shares student loan payment hack as payments resume

'I thought we weren’t paying.'


Tiffanie Drayton


Posted on Oct 6, 2023

One woman has a hack for student loan borrowers to make the most of their efforts to pay down their balances.

In a viral TikTok video with over 1.5 million views, user Lex in Cape Town (@lexlivinglavida1) explained why it’s important to manually assign student loan payments instead of simply relying on autopay.

@lexlivinglavida1 tysm @Alex Basa & Co. (Mk3) for bringing awareness to this! #studentloandebt #studentloans #nelnet #repayment #joebyron #tiktokeducation #fypシ ♬ original sound – Lex in Cape Town

“I just wanted to make my first student loan payment,” the woman began in the video.

She then went on to say that she is taking steps to ensure she is making the most of her payments by focusing on paying off the one with the highest interest. According to her, loan providers have been having unwitting borrowers pay back loans with low interest first.

“They are having you pay the loans with the lowest interest rate,” she alleged. “So the ones with the highest interest rate will sit open and continue to collect interest.”

The TikToker then walked viewers through the process of focusing on higher interest rate loans first when making a monthly payment. She logged into her account with Nelnet, clicked on “make a payment,” and then selected the option for “pay by group” instead of “pay by account.” Doing so allowed her to view her different loan groups. Two of them had interest rates of 5.6% and 6%. However, one was 6.8%, and surprisingly, automatic repayment focused on the two loans with the lower interest rates while putting no payment towards the one with the highest rate.

She then applied her total minimum due payment to the loan with the highest interest rate to reduce the interest that would accumulate.

However, after doing this, she noticed the vendor turned back on her auto-debits, which meant she had to figure out how to turn it off or run the risk of being charged twice.

This turned out to be a challenging task.

“When I went in and tried to turn off my autopay on my cellphone, … it gave me all these error messages,” the woman explained. “This is so shady, y’all.”

Eventually, however, she was able to stop the auto payments from the website.

In the comments section, many took note of the fact that the loans with the lowest interest rates came due before the one with the highest.

“It looked like the other loans say they are due on the 8th of this month, and the one you paid said it wasn’t due until next year,” user Bella Rose noted.

“Bc they automatically assign the ones with the lowest interest rate to be due first!” Lex responded.

Others agreed that you should theoretically pay the loan with the highest interest first, but noted that it also depends on the total amount of the loan.

“Yes, you should pay loan with highest interest first,” user Who wrote. “However, it also depends on the loan amount. You will accrue interest $92.89, $21.59, and $60.”

Student loan payments resumed this month after a three-year-long pause because of the pandemic. Though the Supreme Court struck down the forgiveness program that would’ve offered relief to middle and low-income borrowers, the White House has still been working on measures to provide some relief. Days ago, The Biden Administration approved a $9 billion debt forgiveness program that forgave the loans of public sector workers who paid 10 years’ worth of monthly payments and those with permanent disabilities.

During his time in office, Biden has canceled a total of $127 billion for nearly 3.6 million borrowers.

The Daily Dot contacted NelNet via email and Lex by TikTok comment for more information.

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*First Published: Oct 6, 2023, 5:18 pm CDT