Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.
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Income-driven repayment (IDR) plans can be a huge help if you’re struggling to make your student loan payments. They can lower your monthly payments according to your income, stretching them out over 20 or 25 years. But these plans aren’t set-it-and-forget-it — the government requires you to recertify your income-based repayment or other IDR plan annually.
Here are the step to recertify your IDR plan application, whether electronically or on paper, and what you need to know about the income-driven repayment plan renewal process:
- How to recertify your income-based repayment plan
- Why to take note of your income changes early
- What can delay the recertification process
- What happens if you fail to recertify
How to recertify your income-based repayment plan
There are four types of income-driven repayment plans:
- Income-based repayment (IBR)
- Income-contingent repayment (ICR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
Regardless of which IDR plan you have, you must provide your loan servicer with your updated income documentation and family status each year for recertification, even if your income and household information are the same.
The IDR recertification form requires you to submit the following information:
- Type of request: Check that you are recertifying your loans rather than filing a new application.
- Family size: If you have children or are expecting a child, add the appropriate number of kids to the form.
- Your spouse’s information: The form will prompt you to enter your marital status and whether your spouse has federal loans.
- 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 recent pay stubs or a letter from your employer.
- Signature: Your signature is your guarantee that all the information is accurate.
There are two options for recertifying your loans. You can either submit your request electronically via the Federal Student Aid (FSA) website or mail a paper income-driven repayment form to the designated address.
If you plan to submit your information electronically, you will need to create an FSA ID.
Recertify your income-driven repayment plan online
If you have access to a computer, the electronic recertification tool is simple and easy to use. You can complete the process in less than 10 minutes.
On the income-driven repayment plan page, scroll down. Under “Returning IDR Applicants,” click “Log In to Start” to the right of “Submit annual re-certification of my income.” Remember, you’ll need an FSA ID password to log in.
If you filed your taxes with the IRS, you could use the tax tool through the FSA to retrieve your most recent financial information, such as your income.
If you’re not yet ready to complete the form but you’re looking for more details, click “Start Demo” beneath the login button.
Recertify income-driven repayment on paper
If you prefer to submit a paper IDR form, you can download and print the application. You can also contact your loan servicer and request that it sends you a blank form.
If you have multiple servicers, make sure you have a list of all the servicers you need to contact. Each loan servicer has a different address, and you can contact your lender to find out where to send the completed form.
Why to make note of your income changes early
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 decreases or increases, 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 you’re laid off 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 electronically recalculate your IDR plan monthly payment, or you can submit the paper income-based repayment form and check off the appropriate box under Section 2.
What can delay the recertification process
According to the Department of Education, over half of borrowers fail to recertify for the income-based repayment plan they were on. Why does this happen?
Your lender should send you a reminder to recertify. However, if the reminder is lost, or you procrastinate, you may miss the window.
And even if you do submit everything on time, that’s no guarantee that everything will be processed in a timely manner. According to the Consumer Financial Protection Bureau (CFPB), there have been cases of borrowers whose recertification fell through even though they adhered to their servicers’ deadlines.
Since it’s a process dependent on tax returns and everyone has the same deadline, it’s possible servicers get overwhelmed and papers get lost in the shuffle.
What happens if you fail to recertify
Ensuring you file your recertification on schedule is essential to maintaining your IDR plan.
If you’re using REPAYE and don’t recertify, you’ll be switched to a different repayment plan where your payment won’t be based on your income. If you’re eligible for another repayment plan, you could switch at this point.
If you’re using IBR, ICR or PAYE and don’t recertify, you’ll keep your repayment plan, but it won’t be based on your income. You’ll need to submit the correct information and be qualified in order to make income-based payments again.
This all means that if you have set up automatic payments, your servicer may deduct too much money, resulting in overdrafts and penalties.
Under the IBR, PAYE and REPAYE plans, unpaid interest is capitalized if you don’t recertify, which could cost you hundreds or thousands of dollars more.
If you don’t recertify your family size — under any of the plans — your servicer will assume a family of one. This could increase your monthly payments or cause you to lose eligibility.
Applying ahead of the deadline is your responsibility. Your lender will send you a notification that the deadline is approaching. Setting calendar reminders can keep you on track and help you avoid any issues.
An IDR plan can be a financial lifesaver when you’re trying to keep up with your student loan payments on a limited income. Submitting your income driven repayment plan application is an important task you must do each year to ensure that your payments stay proportional to your income.
If you’re not sure which IDR plan is best for you, head to this guide to learn about your options for federal student loan repayment plans.
