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If you have federal student loans and signed up for one of the four income-driven repayment (IDR) plans, you’ll need to recertify your income each year — meaning that you must submit some paperwork showing your income and a few additional financial details.
It’s important to keep track of when you have to recertify and to actually do so. This way, you won’t have any interruptions to your repayment.
Here’s what you should know about federal student loan income recertification:
- Deadline to recertify
- How to recertify
- What if you forget to recertify?
- Delays in the recertification process
- Recertify annually to stay on track
Deadline to recertify
Federal student loan borrowers can sign up for one of four IDR plans, including:
- Income-based repayment (IBR)
- Income-contingent repayment (ICR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
On an IDR plan, your payments are based on your income and family size. Once you apply and get started with an IDR plan, you’ll get a notice from your federal student loan servicer every year that it’s time to recertify. Your notice will include a deadline, which is usually the same time as when you first entered the IDR plan.
Be sure not to miss this deadline so you don’t risk being removed from your IDR plan. While you might be able to recertify after the deadline, you could see your payments increase until you complete the process — so it’s not a good idea to procrastinate. Instead, try to get it done as soon as possible after receiving the notice so you won’t have to worry about the deadline.
You can also choose to recertify early, which may be a good idea if you would qualify for an even lower payment than you have today and are struggling to keep up.
Learn More: Private Student Loan Repayment Options
How to recertify
Once you get the notice that it’s time to recertify, you are wise to get started right away. You have a couple of options for how to recertify student loans, but you have to submit the same information either way.
The fastest and easiest way to recertify student loans for most people is at StudentLoans.gov. It takes about 10 minutes for most people and must be completed in one session.
Here’s how to recertify your student loans online:
- Go to the Federal Student Aid website
- Scroll down to the Returning IDR Applicants section and click the option to “submit annual re-certification of my income”
- Log in with your FSA ID and password (this is also used for the FAFSA and other federal student loan needs online)
- Enter your household information, including family size, marital status, and basic information about your type of employer
- Complete the income verification by connecting to your IRS tax return (if your income information has changed since your last tax year, you can submit a pay stub or letter from your employer dated no older than 90 days ago)
- Enter your spouse’s income, if applicable
- Submit your latest personal information (like contact information)
- Review and sign your recertification
You can also recertify by mail. This process is a bit more cumbersome, takes more time, and might require a trip to the post office. The information you submit is the same, however.
Here are the steps to recertify student loans by mail:
- Complete the latest IDR plan request form (a recent version is available here)
- Attach required income verification documents
- Send your completed form and documents to the address provided by your loan servicer
Temporarily self-reporting your income
Many student loan borrowers have seen their income drastically swing due to the COVID-19 pandemic. Because of this, the Department of Education will allow borrowers who have only Direct Loans to self-report their income through July 31, 2022.
This means that you don’t have to submit tax documentation when recertifying.
What if you forget to recertify?
If you forget to recertify, a few things can happen:
- If you use automatic payments, it could lead to accidental overdrafts in your checking account or accidentally underpaying — that could mean fees and damage to your credit report and credit score.
- If you have unpaid interest, it could be capitalized, which means it is added to the principal and could increase future interest and payments.
- If you’re working toward student loan forgiveness, forgetting to recertify could derail your plans.
- If you don’t recertify your family size, your servicer will assume that you have a family size of one — this could lead to an increased payment amount if you have a larger family or even loss of eligibility if you’re on PAYE or IBR.
Nothing good happens when you forget to recertify. You can generally go back on the same plan if you complete the application again, but you can’t go back and undo what happened in the months after the deadline.
Just keep in mind that while you can refinance both federal and private loans, refinancing federal student loans will cost you access to federal benefits and protections — such as IDR plans and student loan forgiveness programs.
If you decide to refinance your student loans, be sure to shop around and consider as many lenders as possible to find the right loan for your situation.
Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
Delays in the recertification process
If you sign up for an IDR plan, your servicer should let you know when it’s time to recertify your income and family size. You can generally expect to receive at least two notifications from your servicer reminding you to recertify before the deadline.
It usually takes about two weeks for your servicer to process an IDR application or recertification — however, some borrowers have experienced longer delays. Because of this, it’s a good idea to submit your income documentation as soon as possible — preferably within the 90 days before the deadline — to avoid any potential delays or interruptions to your repayment.
Recertify annually to stay on track
Losing a lower payment from a student loan repayment plan could blow up your budget and put you under serious financial strain. Recertification isn’t too difficult and might take less than ten minutes. If you want to stay on your IDR, annual recertification is a must.
Additionally, if you decide to refinance your student loans, remember to consider your options from as many lenders as you can to find the right loan for your needs. This is easy with Credible: You can compare your prequalified rates from multiple lenders in two minutes — without affecting your credit.
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