Debt Relief Lawyers
Free Initial Evaluation 888.301.0584

Firstmark Services Changes Payment Allocations on Student Loans

The process of paying off student loans can be confusing. Between changing interest rates and varying principal balances, it can be difficult to determine how to best navigate paying off multiple loans in a timely and effective mater. Fortunately, Firstmark Services, a company that services private student loans for major lenders like Citibank, has recently changed their payment allocation policy, helping borrowers to pay down their loans quicker. We've outlined some of the major changes below.

Payments Above Amount Due:

If you find yourself in a position to pay more than your required monthly payment, you are then faced with the concern of which account the extra funds would be applied. Under Firstmark’s new system, any payment received in excess of the balance due is automatically attributed to the loan with the highest interest rate.

Placing priority on the loan with the highest interest rate should serve to mitigate the amount of time the borrower would be paying on the loan, thereby decreasing the overall cost of loan payments.

Student Loan Lawyers in New York & New Jersey


Or Call Today: (888) 301-0584

Payments Below Amount Due:

Unfortunately, one might find themselves in a position where they cannot afford to make the required monthly payment, but nonetheless are able to make a payment of some amount. In this situation, Firstmark will now automatically apply any payment amount to your loan with the lowest current balance. This may seem strange, but this allocation of funds actually serves to cost you less in the long run.

Spreading insufficient payment across multiple accounts can lead to situations where all of your accounts become delinquent. In many instances, delinquency on student loans can lead to additional fees. Applying all of the funds to the account with the lowest balance allows that account to be paid quickly, and avoids the maximum amount of late fees.

Delinquent Accounts:

Should you find yourself in a status of delinquency on multiple accounts, Firstmark’s new system will apply any funds to the account that has been in delinquency the longest. This method of repayment allows for accounts to be in a more equal status of delinquency, meaning that all accounts should cease to be late simultaneously. Similar to the situation previously detailed, this should allow for the avoidance of the maximum amount of late fees.

Of course, this new payment allocation formula may not be the perfect solution for everyone, and thankfully Firstmark is still providing the option of manual payment instructions via mail or online portal.

Call to speak to a student loan lawyer - (888) 301-0584

Law Office of Simon Goldenberg PLLC

Student Loan Payment Allocation

All of these changes are a considerable step forward in demystifying student loan repayment. Firstmark has set a precedent for loan servicers that will hopefully be followed by many to come. Unfortunately, not all loan servicers can be expected to improve their repayment process, and many issues may persist.

If you find yourself in a status of default on multiple student loans, getting back on track can often be difficult. At the Law Office of Simon Goldenberg, PLLC, our student loan negotiation lawyers have helped many distressed borrowers resolve defaulted student loans, sometimes at substantially reduced amounts. Debt settlement, loan restructuring and negotiating payment plans are all courses of action that may be available to you.

Contact us today to learn how we can help you get out of student loan debt.


Not legal advice, for informational purposes only. Not responsible for typographical errors. We are headquartered in New York City and we practice law only in New York and New Jersey. Contact us to learn more.