How to Recertify for Income-Driven Repayment for Student Loans
Income-driven repayment plans can be a great way to pay off your student loans. This article will help you understand if this is a good option for you.
If you’re on an income based repayment plan (IBR) you’ll need to recertify your loan. Same goes for if you’re on income contingent (IC), or even a revised pay as you earn (REPAYE) plan. All IDR recertification means is that you’ll need to submit the necessary paperwork that outlines your income and other relevant financial information every year. Information can include your household size — you’ll still need to recertify even if none of your information has changed from the previous year.
The important thing you need to remember is that you’ll need to submit your recertification request before your deadline. Here, we outline what you need to know when it comes to recertification, including what happens if you miss your deadline.
When You Need to Recertify
You will receive a notice from your federal student loan officer or servicer when it’s time you need to recertify after you’ve started with an income based repayment plan. This notice will include a deadline, or the last possible date you can submit your recertification. If you’re unsure, you can always contact your servicer to find out.
In most cases, your recertification deadline will line up right around the date when you started your income-driven repayment plan each year. For example, if you entered into IDR on May 15th, then your deadline to recertify will fall around that date. You will need to submit all required paperwork within 10 days of your deadline. Think of these 10 days as a grace period of sorts.
You don’t want to miss this deadline. Otherwise, you’ll be at risk of losing your income driven repayment plan. That’s why as soon as you receive your notice, you’ll want to complete the process well before the deadline. It doesn't matter if you complete it months ahead of this date — getting it done sooner means your loan servicer will receive everything they need on time.
You can wait until closer to the deadline, but you don’t want to risk forgetting to do this important task. To help you stay on top of recertification, add a reminder to your calendar so that you receive a notification — on your phone or via email — so that you can remember when you have to submit necessary paperwork.
If you miss the deadline, you can generally go back on an IDR. However, you’ll see an increase in monthly payments until that happens. That’s why you don’t want to procrastinate on student loan recertification — it’ll cost you more to miss the deadline than if you were to spend the time to complete it as soon as you receive your notice.
How to Recertify Your Loan
You’ll have several options when it comes to recertifying your loans — you’ll need to provide the same information whichever one you choose.
The easiest (and arguably the fastest) method to do so is to recertify your student loans on the Federal Student Aid website. It typically takes around 10 minutes and you’ll need to complete the process in one session.
Here are the steps to recertify online:
- Head to the StudentAid.gov
- At the top of the screen, click on “Manage Loans”, then under “Lower My Payments”, click on “Recertify an Income-Driven Repayment Plan”
- Log in using your FSA ID and password (the same one you used to apply for the FAFSA)
- Provide your household information including marital status, family size, and details about your employer
- Connect to your IRS tax return to verify your income — in some cases you may be able to submit a pay stub or letter from your employer from the last 90 days if your income has changed since the last tax year
- If married, enter your spouse’s details
- Enter your current contact information
- Review, then electronically sign your recertification
If you don’t want to recertify online, you can also do so by mail. It’ll take you a bit more time and effort, such as needing to head to the post office. You’ll need to submit the same information — the difference is that you’ll need to complete the income driven repayment plan request form (here’s a current version). You’ll also need to attach any required income verification documentation. After reviewing signing the form, mail it with required documents to the address given to you by your loan service.
Keep in mind that you don’t have to pay any money ever to complete the recertification process. If you stumble upon a source that asks for money, or an application fee on a form, it’s a scam.
What Happens if You Don’t Recertify
There are several scenarios that will happen if you miss the deadline and don’t recertify. The most common one is that you’ll have to start making higher monthly payments. If you enroll in automatic payments, you may be underpaying accidentally, or overdrafts in your checking account if you don’t make the necessary updates. In this case, you could face late fees, and even negatively impact your credit report and score.
You may have even higher payments because of an increase in interest. In other words, if you have unpaid interest, it may be added to your principal balance. This means your interest is capitalized and may increase your future payments.
For those working towards student loan forgiveness, not recertifying your student loan could mean you’re at risk of having to start over again, or derail your timeline.
All this to say, you want to remember to recertify well within the deadline. You can’t undo what happens, even if you can go back on the same repayment plan eventually.
Stay on Track With Recertification
Potentially making higher payments because you’re not longer on your student loan repayment plan can wreak havoc on your budget. It only takes a few minutes to recertify and can save you thousands of dollars in interest — it’s a must if you want to remain on your IDR.
If you’re someone who wants to save money on student loan interest, there are also other options available. Those who have good credit may be able to qualify for a lower interest rate by refinancing to private student loans. Consider using Juno to check what rates may be available to use — there’s no obligation to sign up for a new loan, and your credit score won’t be affected.
Sarah Li Cain
Sarah Li Cain is a finance writer and a candidate for the Accredited Financial Counselor designation whose work has appeared in places like Bankrate, Business Insider, Financial Planning Association, Investopedia, Kiplinger, and Redbook. She’s the host of Beyond The Dollar, where she and her guests have deep and honest conversations about money affects their well-being.
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