What is re-certification and why is it important?
Simply put: You must re-certify your family size and income annually 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!
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.