What is re-certification and why is it important?
Simply put: You must re-certify your family size and income EVERY YEAR to remain in your Income-Driven Repayment Plan (IBR, ICR, PAYE, RE-PAYE). While millions enjoy the payment benefits of the Federal Income-Driven Repayment programs, many do not complete the annual recertification requirement. While it would be nice if you only had to enroll in your plan once and then simply make the monthly payments, this, unfortunately, isn’t the case. Re-certification means that each year you are required to submit your income information and family size to confirm your continued eligibility and determine your monthly payment amount. You have an obligation to do this EVEN IF NOTHING HAS CHANGED.
And while this may seem like a simple task easily completed with a few keystrokes, enormous numbers of people fail to re-certify causing major issues for those borrowers that don’t. To help with this, we have created this step-by-step guide for re-certification to make sure that you can always navigate around any potential issues that could put your IDR plan in jeopardy. By following these simple steps, you’ll be able to avoid any potential problems each and every year.
Tip: While loan servicers should send you reminders when it’s time for you to re-certify—as well as make the process as streamlined as possible—unfortunately, many of them are notorious for mishandling re-certification requests. This is why it’s so important to make sure to take personal responsibility for ensuring that your re-certification goes through correctly every time.
Knowing this, let’s start with some of the basics:
Why you need to be sure to recertify every year.
Because it is required to stay in your Income-Driven Repayment plan AND
a failure to re-certify can have some very unpleasant consequences, such as:
- Sudden increases in your monthly payments (often back to the much-higher Standard Repayment amount)
- Potential overdrafts if you have your student loan payments on auto-debit
- Additional accrued interest if you fail to re-certify and must use forbearance while you update your information (which could extend your forgiveness payoff date)
- Unpaid interest could be capitalized and added to your principal balance (in some cases this may be irreversible)
When you need to re-certify each year:
In most cases, re-certification is done around the same time each year when you initially began making payments to your current IDR program.
However, you can also re-certify anytime your income or family size changes. This means you could potentially re-certify more than once per year if your situation changes and you need to have your monthly payment adjusted accordingly.
Note: If you have multiple loan servicers, you will need to re-certify with each one individually every year as well as when your income or family size changes.
What you’ll need to re-certify:
There are a few documents you’ll need to submit to complete your re-certification.
- Copy of the Income-Driven Repayment Plan Request Form (the same new application form you submitted originally)
- Copy of your most recent tax return (or employment pay stubs)
- Additional documentation for other loans (if applicable)
How to re-certify your Income-Driven Student Loans:
Re-certification is done by actually submitting an entirely new IDR application each year. In the section that asks for the reason for your application, you will indicate that you’re submitting updated information to have your monthly payments recalculated.
This new application submits your income and family size information directly to the Department of Education. There are two ways to complete this process: online or by mail. Online is by far the quickest and most efficient option.
Here’s what you’ll need to do:
- Log in to the online portal at Federal Student Aid
- Click the “Complete Income-Driven Repayment Plan Request” link
- Retrieve and submit your most recent tax information (or paycheck stubs)
- Once you’ve completed your submission, your loan servicer will notify you once the recertification process is completed (or if any additional information or documentation is required)
- Check on the status of your submission frequently to ensure that all necessary information was received and the process is moving forward (DO NOT neglect this step)
(If you would rather submit your documentation by mail, you can also download a PDF version here.)
Following these five simple steps will give you the best chance of having your re-certification go through smoothly so you can continue to enjoy all the benefits of your IDR.
In order to keep your IDR loan payments as low as possible, it’s critical that you complete your re-certification on time every year. Failure to do so can result in some very unpleasant consequences and can cost you a lot of money. We hope that this guide will help you avoid that situation from now on!