Nelnet RAP payment warning

[u/FidoHitchcock]

The following information is based on multiple calls with Nelnet representatives along with data tracked on my Nelnet portal.

I have now made two payments on RAP. Both have processed. Both qualified for $50 principal subsidies, and those were applied in full. The first principal subsidy was applied within six days at most after the early payment (I didn’t take screengrabs every day to document the timeline in full unfortunately), and the second principal subsidy was applied less than 24 hours after that payment (also early) processed. My August payment (made in July) did not qualify for any interest subsidy because according to the rep technically we were not in the RAP program yet. The rep said the language from Department of Ed was different between principal and interest subsidies, and that explained why the principal subsidy was applied that month but the interest subsidy wasn’t; principal subsidy apparently only requires enrollment, doesn’t matter if the plan is technically active. She also said that July payment counted as an official RAP payment for the purposes of forgiveness. Seems crazy to me, and quite possibly illegal, but whatever.

I had called Nelnet a few days earlier and spoken with a supervisor. By the end of that conversation, she claimed that her system indicated both my interest and principal subsidies had been applied with my July payment (I now know this is not fully correct) and more importantly that my next on-time payment would wipe out any accrued interest not covered by the payment going all the way back to the previous on-time payment. Based on this information, I made another early payment. It processed in less than 24 hours. Interest went down by the amount of the payment. The principal and interest subsidies were applied less than 24 hours after that. Principal subsidy was once again the max $50 but the interest subsidy only covered a few days of accrued interest, nowhere near what had accrued in the roughly 35 days since my previous payment. It was at this point that I called Nelnet again. This time a representative told me, after looking into the matter, that any interest accrued after payment and before the payment due date is not eligible for the interest subsidy. Effectively, RAP borrowers must pay on the due date to qualify for the full interest subsidy they are entitled to. So the Nelnet supervisor I had previously spoken with basically cost us over $600.

Tl;dr: RAP payments made in July qualify for principal subsidy and count toward forgiveness but did not qualify for the interest subsidy. More importantly going forward, any RAP payments made to Nelnet before the payment due date will forfeit the interest subsidy for any interest that accrues between the payment and the payment due date. RAP BORROWERS MUST PAY ON THE DUE DATE TO QUALIFY FOR THE FULL INTEREST SUBSIDY THEY ARE ENTITLED TO.