Student Loan Recertification — On Hold Until June 2023

Most federal student loan borrowers won’t need to recertify their income and family size until June 2023. The student loan recertification date may be earlier if you have FFEL Loans.

Student loan recertification is the process borrowers undergo to remain in an income-driven repayment plan. Each year, you must update the Department of Education on 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.

You don’t need to recertify while payments are suspended due to the pandemic. But if your adjusted gross income on your tax return has increased since last year, it may make sense to recertify your loans before you file taxes.

Here’s everything you need to know about IDR annual recertification.

Download the IDR Application for Annual Recertification

President Biden recently extended the payment pause until sometime in 2023 to allow time for the litigation surrounding his student loan cancellation plan to end.

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 their current repayment period ends.

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.

The CARES Act-related administrative forbearances are set to expire sometime in 2023. 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 be required 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 if it has changed significantly during the forbearance. When the forbearance ends, your student loan payments will restart at the new amount.

Related: When Do Student Loan Payments Resume?

Here’s the recertification deadline for borrowers with Ed-owned student loans.

• Aidvantage – June 2023 at the earliest.

• American Education Services – Check your recertification date with the loan servicer. The federal loans AES services are privately held FFEL Loans that aren’t covered by the payment pause and must be recertified according to your current annual recertification date.

• FedLoan Servicing – June 2023 at the earliest.

• Great Lakes – June 2023 at the earliest.

• ‍HESC/EdFinancial – June 2023 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.

• ‍MOHELA – June 2023 at the earliest.

• ‍Navient – Check your recertification date with the loan servicer. The federal loans Navient services are privately held FFEL Loans that aren’t covered by the payment pause and must be recertified according to your current annual recertification date.

• ‍Nelnet – June 2023 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.

You can now self-report your income when you apply for or recertify an IDR plan if all of your loans are Direct Loans. This means you can report your earnings without submitting tax documentation.

This option will end on June 30, 2023.

To use the self-report feature, launch the IDR application as usual. Select “I’ll report my own income information” in Step 2 (Income Information).

You can complete the recertification process for the IBR, ICR, PAYE, and REPAYE plans 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 federal student loan servicer.

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 differ from 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 taxable income documentation (e.g., a recent pay stub or letter stating gross income).

• Your spouse’s income information. Married borrowers must 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) if you can’t reasonably access your spouse’s income information.

Your annual recertification deadline is ordinarily 12 months from the date you entered into an IDR Plan. But your recertification date may have changed due to the CARES Act forbearance. 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 learn the new date.

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 maintain an affordable payment.

You can recertify your income and family size online at StudentAid.gov or submit a paper application to each loan servicer. The benefit of recertifying online is that your application and tax return are automatically sent to your servicer. But 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.

1. Go to the Federal Student Aid website.

2. Under “Manage My Loans,” click the option to “Recertify an Income-Driven Repayment Plan.”

3. Log in with your FSA ID and password (this ID is also used for the FAFSA).

4. Enter your household information, including family size, marital status, and basic information about your employer.

5. 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).

6. Enter your spouse’s income, if applicable.

7. Submit your latest personal information (like contact information).

8. Review and sign your recertification.

You can also recertify by mail. This process is a bit more cumbersome but gives you greater control over 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.

1. Complete the IDR plan request form (download a recent version here).

2. Attach the required income verification documents.

3. Send your completed form and documents to the address provided by your loan servicer.

If your income decreases, you can request lower monthly payments by recertifying early.

You’ll use a pay stub or other proof of your current income when you recertify early. If you have no income due to unemployment, you can skip this step.

If you forget to recertify, you can enroll in your current IDR Plan again. But you may suffer penalties.

The penalties for failing to recertify include the following:

• 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 process of adding interest to your loan balance is called capitalization. The income-contingent repayment plan does not capitalize unpaid interest if borrowers miss the recertification deadline.

• Decrease in family size. 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 toward those required payments.

Timing the recertification process to get the lowest monthly student loan payment can be tricky. Over the years, I’ve helped all types of borrowers, including those with Parent Plus Loans, evaluate their repayment options to get a payment amount that fits their financial goals.

Schedule a call with me today. We’ll review options to help you take control of your student loan debt.

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