A little over a year ago, I was thrilled to refinance my student loans at 3.5% fixed with PenFed. Thrilled. The interest and payment abatement on student loans, instituted at the start of the COVID-19 pandemic, was supposed to come to an end early in the new year, and I was excited to complete my refinance while interest rates were still low. PenFed was a great lender and the application process was fairly simple.
My refinance fevor was slightly dampened after the Biden Administration extended the interest and payment abatement on student loans several more times. Had I declined to refinance my student loans, I would have saved a little more than $200.00 in interest each month. A year later, interest and payments still abated, and I would have now saved more than $2,400.00.
While I am thrilled that our society is having meaningful conversations about student loan debt relief, I have been feeling a bit bad for myself and what would appear to be my mistimed student loan refinance. At least I was until I received this email from PenFed earlier this afternoon…
It’s rare that good news follows “Important information regarding your student loan” and momentary panic set in when I read the email subject line. PenFed had been great up to this point and I was dreading whatever change was going to accompany this correspondence. However, after reading and rereading the email several times, I finally realized that this was likely the best news I had received about my student loans…ever. While the refund for the finance change overpayment is appreciated, on principle, the reduction of my interest rate “…by 0.999315% for the remainder of the loan” is a much bigger deal. A rough estimate suggests that if I only made minimum payments on my student loan for the remainder of the term, the reduction in interest rate alone would shave off seven months of payments and interest.
Now, I have not taken leave of my senses and I have every intention of returning to aggressive student loan repayment in the near future once I have stabilized my finances.
Has this ever happened to anyone else? Honestly, I don’t entirely understand why they responded in this wonderful way given that I have had my loan with them for a little over a year. Excellent customer service? Am I missing something?
UPDATE: So after Avery and my exchange in the comments, I just KNEW it was phishing. So I called PenFed at 9:10PM ET this evening, and after confirming my identity, I rambled a bit about how I thought I might have received a phishing email. The woman interrupted me mid-ramble to say, “Yes…” and I immediately took that to be confirmation that it was phishing and began to ramble some more. She then interrupted me and said, “Could you please confirm your address?” I did. She then said, “Yea, you hadn’t confirmed your address in a while so I needed you to do that. But otherwise, that was a perfectly legitimate email. Is there anything else I can help you with?” I thanked her profusely and then slinked off, 1% less indebted.
2 thoughts on “My student loan interest rate…drops?”
Wow… am I reading that right? That’s basically a 1% drop in your rate?? Their explanation seems to point to some kind of leap year recalculation? I’m still not understanding how a one day difference in leap year could make such a big difference. I think that part is a reference to the $2.09 credit so the rate drop is still a mystery! Well, that wonderful and you deserve it!
Right?!? I thought maybe it was phishing (they directed me to “log in” using a link in the email… suspicious?) so I promptly DID NOT do that and instead logged into my account through another browser tab. I then found it suspicious that a copy of that communication was not in my “inbox.”
Based on the fact that you also think it’s a bit odd (doesn’t make sense), I’m going to call them…
If it turns out it was phishing, then whoops for them. University B is so vigilant in their test emails of us that I never open website links embedded in emails. Dos whoops for the fact that I only have my auto and education loan with PenFed and no bank accounts (other than the $5.00 “share” required to be a member of the credit union).