When Do I Have to Recertify My Student Loans?

Many federal student loan borrowers use income-driven repayment (IDR) plans to manage monthly payments. These plans adjust payment amounts based on a borrower’s income and family size. To ensure these adjusted payments remain accurate, borrowers must periodically recertify their financial information.

Understanding Income-Driven Repayment Plans and Recertification

Income-driven repayment plans, such as Pay As You Earn (PAYE), Saving on a Valuable Education (SAVE, formerly REPAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR), calculate monthly payments as a percentage of a borrower’s discretionary income, considering family size. As financial situations change, payments can adjust, potentially becoming as low as $0 per month.

Recertification is the annual process where loan servicers verify a borrower’s continued eligibility for an IDR plan. It involves recalculating the monthly payment based on current income and family size. This yearly update ensures payments accurately reflect a borrower’s financial circumstances. Even if income or family size has not changed, annual recertification is mandatory to remain on the IDR plan.

Key Recertification Deadlines and Events

Borrowers on an income-driven repayment plan must recertify their income and family size annually. This recertification date generally falls a year after a borrower initially enrolled or last renewed their IDR plan. Borrowers can find their specific due date by downloading their National Student Loan Data System (NSLDS) file from StudentAid.gov or by contacting their loan servicer.

Borrowers can recertify before their annual due date if their financial situation changes. For instance, if income decreases or family size increases, submitting new information early can lead to a lower monthly payment. This proactive recertification allows for an immediate adjustment, valid for 12 months. Loan servicers send reminders 60 to 90 days before the deadline.

Missing the recertification deadline can lead to changes in monthly payments. For most IDR plans, if a borrower fails to recertify on time, payments revert to the standard 10-year repayment amount, which is often higher. For some plans, like SAVE, missing the deadline may result in being moved to an alternative repayment plan. For IBR, accrued interest may capitalize, meaning unpaid interest is added to the principal loan balance.

Gathering Information for Recertification

To recertify, borrowers provide current income and family size. The main method for income verification involves allowing the loan servicer to retrieve tax data directly from the IRS using the IRS Data Retrieval Tool (DRT). This tool securely transfers a borrower’s Adjusted Gross Income (AGI) from their most recent federal tax return to the Department of Education.

If a borrower’s tax information does not accurately reflect their current income, such as due to a recent job loss or decrease in earnings, alternative documentation can be provided. This might include recent pay stubs, an employer letter stating current income, bank statements, or unemployment benefits statements. Alternative documentation needs to be dated within 90 days of the application.

Family size is also a component of recertification. It includes the borrower, their spouse if married, and any children or other dependents claimed on their federal income tax return. The information gathered, whether through the IRS Data Retrieval Tool or alternative documentation, will be used to complete the official recertification forms or submitted through online portals.

Completing the Recertification Process

Borrowers can submit their recertification request online through the Federal Student Aid (FSA) website, StudentAid.gov. This portal allows borrowers to log in with their FSA ID, verify their financial information, and consent to the IRS transferring income data. Online submission is faster and can send the request to multiple servicers.

Alternatively, borrowers can submit recertification by mail. This involves downloading and completing a paper Income-Driven Repayment Plan Request form and mailing it, along with any required supporting income documentation, to their loan servicer. Keep copies of all submitted documents and confirmations for personal records. After submission, borrowers should expect a processing period and can check the status through their loan servicer’s online portal or by contacting them directly.