Most federal student loan borrowers won't need to recertify their income and family size until August 2022. The student loan recertification date may be sooner if you have FFEL Loans.
Student loan recertification is the process borrowers undergo to remain in an income-driven repayment plan. Each year, you’ll need to reconfirm your family size and income so your federal loan servicer can calculate a new monthly payment. Your new payment won’t start until your current 12-month repayment term ends. Here’s what to know about IDR annual recertification.
What is student loan recertification?
Student loan recertification is the U.S. Department of Education’s process to determine the new monthly payment for borrowers in an income-driven repayment plan. To avoid consequences, borrowers must complete the annual recertification before the end of their current repayment period.
Note: Only federal student loans are eligible for income-driven repayment. If you have private student loans, check with your lender to see what repayment options they offer.
End of Covid-19 Forbearance & Student Loan Repayment
The CARES Act-related administrative forbearances are set to expire May 1, 2022. After that, the interest rate will increase to its pre-covid rate, and your payments will resume. Before that happens, student loan borrowers will:
- Get notice of their payment at least 21 days before their first monthly payment is due.
- Not need to recertify their income before the end of the COVID-19 forbearance. If your recertification date ends before the forbearance ends, your loan servicer will send you a new recertification date.
- Be allowed to recalculate their income during the forbearance if their income has changed significantly. When the forbearance ends, your student loan payments will restart at the new amount.
Learn More: Update on Student Loan Payment Pause
IDR Recertification Deadline 2022 for Each Loan Servicer
Here’s the recertification deadline for borrowers with Department of Education held loans.
- FedLoan Servicing - August 21, 2022 at the earliest.
- Great Lakes - August 21, 2022 at the earliest.
- HESC/EdFinancial - August 21, 2022 at the earliest.
- MOHELA - August 21, 2022 at the earliest.
- Navient - August 21, 2022 at the earliest for all Department of Education held loans. Those loans are in the process of being transferred to Maximus/Aidvantage. Non-Education Department owned FFEL Loans will need to be recertified according to your current annual recertification date.
- Nelnet - August 21, 2022 at the earliest for all Department of Education held loans. Non-Education Department owned FFEL Loans will need to be recertified according to your current annual recertification date.
How do you recertify income-based repayment?
You can complete the recertification process for the IBR, ICR, PAYE, and REPAYEPlans online at the Federal Student Aid website, studentaid.gov. You’ll need an FSA ID to log in. You can also submit a paper Income-Driven Plan Request form to your loan servicer.
Recertifying online can be faster and easier. Studentaid.gov allows you to access your most recent tax return using the IRS Data Retrieval Tool. The site also lets you submit your annual recertification to each of your federal student loan servicers.
When you recertify, you’ll provide the same information you did when you first applied for an IDR Plan:
- Your personal information. Update your address, phone number, and email if necessary.
- Your family size. Family size can be different than the number of dependents you claim on your tax return. It includes people you support more than 50% of the time.
- Your income information. If you filed an income tax return in the past two years, you could use your tax return to certify your income. But if you haven’t filed a return in that time, or if your income has significantly changed since you filed, you can use alternative income documentation (e.g., a recent pay stub or letter stating gross income).
- Your spouse’s income information. Married borrowers are required to include their spouse’s income and have their spouse sign the form — even if their spouse’s income won’t be used to calculate their monthly payment. The two exceptions are (1) if you’re married but separated from your spouse, or (2) you can’t reasonably access your spouse’s income information.
What is your recertification deadline?
Your annual recertification deadline is ordinarily 12 months from the date you entered into an IDR Plan. However, due to the CARES Act forbearance, your recertification may have changed. The current guidance from the Department of Education is to allow borrowers to skip the recertification process until the forbearance ends. Once that happens, borrowers can contact their loan servicer to find out the new date.
When should I recertify my student loans?
Federal student loan borrowers should recertify their income and family size two months before their current 12 month payment period expires. You also can recertify your income and family size earlier if your income decreases or your family size increases. Recertifying early allows you to always have an affordable payment.
Where do I recertify my student loans?
You can recertify your income and family size online at studentaid.gov or by submitting a paper application to each of your loan servicers. The benefit of recertifying online is that your application and tax return are automatically sent to your servicer. However, if you haven’t filed a tax return in the past two years or your income has changed significantly, mailing or faxing your documents is the way to go.
Follow these steps to recertify student loans online:
- Go to the Federal Student Aid website.
- Under “Manage My Loans”, click the option to “Recertify an Income-Driven Repayment Plan”.
- Log in with your FSA ID and password (this ID is also used for the FAFSA).
- 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 decreased since the last tax year, you can submit a pay stub or other proof of income within the past 90 days).
- 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 but gives you greater control of completing the application. It also allows you to have a paper trail to keep, which is especially important if you’re pursuing student loan forgiveness.
Follow these steps to recertify student loans by mail:
- Complete the IDR plan request form (download a recent version here)
- Attach required income verification documents
- Send your completed form and documents to the address provided by your loan servicer
What happens if your income decreases?
If your income decreases, you can request lower monthly payments by recertifying early.
When you recertify early, you’ll use a pay stub or other proof of your current income. You can skip this step if you’re unemployed and have no income.
What happens if you forget to recertify?
If you forget to recertify, you can enroll again in your current IDR Plan. But you may suffer penalties.
The penalties for failing to recertify include:
- Payment increase. Missing the recertification deadline stops your payments temporarily from being based on your discretionary income. Your new payment will be based on the 10-Year Standard Repayment Plan, which will likely cause your payment to increase significantly.
- Interest capitalization. The Income-Based Repayment, Pay As You Earn, and Revised Pay As You Earn plans add unpaid interest to your principal balance if you don’t recertify on time. The processing of adding the interest to your loan balance is called capitalization. The income-contingent repayment plan does not capitalize unpaid interest if borrowers miss the recertification deadline.
- Family size decrease. If you fail to recertify on time, your loan servicer will calculate your new monthly payment amount based on a family size of 1, no matter how many people are in your family.
- Lose eligibility for PSLF. Public service workers can get their Direct Loans forgiven under the Public Service Loan Forgiveness Program after making 120 monthly payments under an IDR plan. Failing to recertify temporarily stops you from earning credit towards those required payments.
Need help with your annual recertification? Let’s talk
Timing the recertification process to get the lowest monthly student loan payment can be tricky. Over the years, I’ve helped borrowers, including borrowers with Parent Plus Loans, like you evaluate their repayment options to get a payment amount that first their financial goals.
Schedule a free 10-minute call with me today. We’ll go over options to help you take control of your student loan debt.