If you’re struggling with your student loan payments, an income-driven repayment (IDR) plan can be a huge help.
Under IDR, your payments are capped at a percentage of your income, reducing how much you owe each month.
However, IDR plans are not a set-it-and-forget-it solution. Since your income and family information can change every year, the government requires you to renew your IDR each year.
Below, find out how to recertify your income-driven repayment plan application and see what you need to know about the renewal process.
How does the recertification process work?
There are four types of income-driven repayment plans: Income-Based Repayment, Pay As You Earn, Revised Pay As You Earn, and Income-Contingent Repayment.
Regardless of which IDR plan you currently have, you must provide your loan servicer with your updated income documentation and family status each year. Even if your income and household information is exactly the same, you still have to recertify your IDR plan annually.
The IDR recertification form requires you to submit the following information:
- Proof of income: The government asks you to submit your most recent tax return to show your updated income. If you don’t have your tax return, you may be able to submit alternative documentation, such as your recent pay stubs or a letter from your employer.
- Type of request: Under the type of request, check that you are recertifying your loans rather than filing a new application.
- Your spouse’s information: The form will prompt you to enter your marital status and whether or not your spouse has federal loans.
- Family size: If you have children or are expecting a child, add the appropriate number of kids to the form.
- Signature: Your signature is your guarantee that all the information is accurate.
- FSA ID: If you plan to use the Federal Student Aid (FSA) website to submit your information, you will need to create an FSA ID.
There are two options for recertifying your loans. You can either submit your request electronically via StudentLoans.Gov or submit a paper income-based repayment form.
Submitting your electronic income-driven repayment plan application
If you have access to a computer, the electronic recertification tool is simple and easy to use. You can complete the process in under 10 minutes.
On the income-driven repayment plan page, scroll down to the applications section. Then under “Returning IDR Applicants,” click on “Submit Re-certification” next to the “Submit annual re-certification of my income” portion.
If you filed your taxes with the Internal Revenue Service (IRS), you could use the tax tool through the FSA site to retrieve your most recent financial information, like your income.
When you use the FSA tool, the site notifies your federal loan servicers that you recertified your IDR plan. Once you complete the application, you do not have to submit any other forms. Your servicer will contact you once they have processed your recertification.
The paper IDR recertification process
If you prefer to submit a paper form, you can download and print the income-driven repayment plan application. Alternatively, you can contact your loan servicer and request that they send you a blank form.
Unlike the electronic version, if you have federal loans from several servicers, you need to submit a separate IDR plan recertification for each lender. Make sure you have a list of all of the servicers you need to contact.
Before filling out the form, make sure it’s the latest version. The IDR plan form was updated in 2017. The newest version has an expiration date of 10/31/2018 on the top right.
Each loan servicer has a different address, so make sure you contact your lender to find out where to send the completed form.
Take note of your income changes
When you sign up for an IDR plan, your payments may not stay the same for the duration of your repayment period. If your income changes — either a decrease or an increase — your payments will change, too.
The government only requires you to recertify your income and household size once a year, but you can do it more often if needed. For example, if your employer lets you go and you have to accept a lower-paying job, you can recertify your income early and get a reduced monthly payment.
To recertify your income ahead of schedule, you can complete the form electronically by selecting “recalculate my IDR plan monthly payment.” Or, you can submit the paper income-based repayment form and check off the appropriate box under section two.
Failure to recertify
Ensuring you file your recertification on schedule is essential to maintaining your IDR plan. If you miss the filing deadline, your payments may jump up to the amount they were under a Standard Repayment Plan.
And that means that if you set up automatic payments, your servicer can withdraw a lot more money than you anticipated, resulting in overdrafts and penalties. Interest charges can also be added to your account, costing you hundreds or even thousands of dollars more.
Making sure you apply ahead of the deadline is your responsibility. Your lender will send you a notification that the deadline is approaching, but each servicer can have a different date. Setting up calendar reminders can keep you on track and help you avoid any issues.
Managing your student loans
IDR plans can be a huge help when you’re trying to keep up with your student loan payments on a small income. That’s why submitting your income-driven repayment plan application is an important task you must do each year to stay on your plan.
For more information about your student loan repayment options, check out our complete guide for income-driven repayment plans.
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