Do I Have to Recertify My Income Driven Repayment Plan?
Navigate recertification for your Income-Driven Repayment plan to ensure accurate payments and prevent common pitfalls.
Federal student loan borrowers often seek repayment options that align with their financial capacity. Income-Driven Repayment (IDR) plans calculate monthly payments based on a borrower’s income and family size. To ensure these payments remain accurate and affordable, borrowers must regularly update their financial information through a process known as recertification. This annual requirement helps to adjust payments as personal circumstances evolve, maintaining the integrity of the IDR program.
Understanding the Recertification Requirement
Recertification is a mandatory annual process for nearly all borrowers enrolled in an Income-Driven Repayment plan. This update ensures that your monthly student loan payment accurately reflects your current financial situation, including your income and family size. The specific due date for recertification is unique to each borrower, falling one year after entering or last renewing an IDR plan.
Even if your income or family size has not changed, recertification is still required to maintain your IDR plan eligibility. If a life event such as a job loss, a decrease in income, or an increase in family size occurs before your annual due date, you have the option to recertify sooner. This proactive step can lead to an immediate recalculation of your monthly payment, potentially lowering it to better suit your changed circumstances.
Gathering Information for Recertification
Before initiating the recertification process, borrowers need to compile specific financial and personal documentation. The primary piece of financial information required is your Adjusted Gross Income (AGI), found on line 11 of your most recent IRS Form 1040. Your AGI determines your discretionary income, a component in calculating your IDR payment.
If your income has changed since your last tax filing, or if you have not filed recently, alternative documentation of income may be submitted. This can include recent pay stubs, a letter from your employer certifying your gross income, or other official statements demonstrating your current earnings. Providing consent for the Department of Education to access your federal tax information directly from the IRS can streamline this process, often allowing for automatic recertification. You will also need to provide accurate information regarding your family size, which includes yourself, your spouse if filing jointly, and any dependents for whom you provide more than half of their support.
Steps to Recertify
Once all necessary information is gathered, borrowers can proceed with submitting their recertification request. The most common and recommended method is to complete the Income-Driven Repayment Plan Request online through StudentAid.gov. This online portal allows for direct submission and, if you provide consent, can automatically retrieve your federal tax information, simplifying the process.
For those who prefer or require an alternative, recertification can also be completed by mailing a paper form to your loan servicer. The Income-Driven Repayment Plan Request form is available for download, and it should be filled out accurately with all required documentation attached. Your loan servicer is required to send you a reminder notice about 90 days before your recertification deadline. Submitting your information at least 35 days before your deadline is advisable to ensure your next billing statement reflects the updated payment amount.
What Happens If You Don’t Recertify
Failing to recertify your Income-Driven Repayment plan by the annual deadline can lead to financial consequences. Your monthly payment amount will no longer be based on your income and family size. Instead, it may revert to the amount you would pay under a Standard Repayment Plan, which can be considerably higher.
Accrued interest on your loans may be capitalized, meaning any unpaid interest is added to your principal balance. This increases the total amount you owe and can lead to more interest accruing over the life of the loan, ultimately increasing your overall repayment cost. Failure to recertify can also result in the loss of eligibility for future interest subsidies or progress towards loan forgiveness. While it is possible to re-enroll or update your information after missing the deadline, acting quickly to contact your loan servicer is necessary to mitigate these adverse effects.