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greeny1026

Advice needed for handling student loan correction

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TL;DR - What account corrections should I expect when correcting an erroneous capitalization event made 5 years ago with over payments made on the loan while it was capitalized?

 

Whole story:

I have 4 federal unsubsidized student loans (all fixed at the same rate and totaling ca. $20k) that all capitalized in 2013 due to a clerical error made by my graduate school institution. As I am still a full-time student, these loans should have stayed in deferment (and have been in deferment since the initial capitalization) throughout my graduate studies. The admin paperwork side of this issue has been handled and my loan holders have confirmed the error, which leads us with corrections to be made to my account balance.

 

Between 2013-today, I've been making payments (and collecting interest) on my loans. I was able to pay one off last year, but due to the capitalized interest, I overpaid by ca. $3k with 4 extra months of payment on this loan. Payments on the rest were only to interest and after removing the capitalization, only resulted in a lower amount due. I have two specific questions as to what to expect as far as these corrections go: 1) what happens to the over payment (redistributed to other loans, refunded, etc.) and 2) is it realistic to expect a deduction from the interest accrued on the other loans over the course of the 4 months during which I was paying on a loan that should have already been done?

 

I appreciate any and all advice!

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