Whenever you have a loan there are two portions: current principal balance and interest accrued. They must be kept separate because daily interest is based on your current principal balance and if you combined them you would be paying interest on interest (there are of course times when interest is added through capitalization).
This causes a lot of problems for people who make payoff payments without figuring out the appropriate way to do so first. If you pay the balance that is just listed on the bill, you will more times than not be paying off just the principal. This will cause you to have a balance left over that reflects that interest that had accrued on the account. This is because payments go to interest first and then principal so your full payment won’t be placed directly on principal.
The way to avoid this is by using the proper channels to receive a payoff. You can either contact your servicer and ask them for a payoff. If you are making it online or over the phone it can be done for the day the payment is made, if by check or money order 10 business days will usually be added for receiving the money and processing time. In addition you can receive payoffs through the companies website. Each company does this different but make sure and look for the word payoff.
If you are off by a few cents don’t worry. Most federally backed companies have a write off amount where if you are under a certain amount instead of having to send in a new 43 cent check, they will write off the remaining balance and consider the loan paid in full.