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.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|