Income-driven repayment (IDR) plans are designed to help you make more affordable payments on your student loans.
To read more about your options when it comes to income-driven repayment plans, check out these posts:
- The Complete Guide to Pay As You Earn (PAYE)
- How Does the REPAYE Student Loan Interest Subsidy Work?
- How REPAYE Changes Student Loan Repayment for the Better
As the name suggests, an income-driven plan requires that you prove that you are eligible for these types of plans by presenting proof of your income.
As the years go by, it is likely that your income level will change; whether it is for the better or worse.
In these instances, you will have to re-certify your income with the government so that the payments can be adjusted to the current amount of money that you make.
Also, if you have signed up for an IDR plan in the past, it is required that you come back and re-certify your income and information about your family size each year.
In this post, we will go over how you can go about re-certifying your income for IDR plans.
How to Re-Certify Your Income for Income-Driven Repayment
What Do You Need?
In order to re-certify your income, you will need to visit the Studentloans.gov website.
Make sure you have the following things handy:
- Your FSA ID.
- Personal information including your permanent address, email, home telephone, mobile telephone, family size, marital status, the best time to reach you, etc.
- Financial information. This is where you will report how much you are making. The Studentloans.gov website has a data retrieval tool that is linked to the Internal Revenue Service (IRS).
You can submit your income using the IRS tool. In this case, your adjusted gross income from your last tax return will be used to report your income.
If your income has changed since the last time you filed a tax return, you can still submit your application electronically. However, you will be contacted by your loan servicer to provide documentation of your income.
If you’re married, in most cases, since the repayment plan is based on your combined income as a married couple, your spouse will have to co-sign on the IDR plan. But don’t worry. Even though your spouse will have to co-sign on the IDR plan, they are not obligated to pay off your student loans.
Is There a Fee to Re-Certify Your Income for an Income-Driven Repayment Plan?
The answer is no.
If you follow the instructions above, you don’t have to pay a cent to anyone to have your income re-certified.
There are, however, private companies who will offer to do this for you for a fee. While some of these companies may be legitimate, you honestly don’t need them. And no matter what they say, none of these companies are affiliated with the federal government or the U.S. Department of Education in any way.
The form to fill out to re-certify your income is fairly straightforward and you really don’t need anyone to fill it out for you.
Furthermore, it will take you between 10 and 20 minutes to fill it out.
So, no, you don’t need to pay anyone to re-certify your income for an income-driven repayment plan.
The Benefits of Re-Certifying Your Income (and a Minor Dark Side)
IDR plans were introduced to help people, regardless of their income level, keep up with student loan payments without going into default and incurring large fees.
Re-certifying your income will ensure that you are paying an amount that is fair and commensurate to what you’re making right now.
The other side to this, however, is that paying smaller amounts towards your student loans means it will take you longer to finally finish paying off your loans.
So while you re-certify your income for an IDR plan, I challenge you to think of other innovative ways to pay off your student loans quicker.
For instance, you might want to find ways to make an extra income.
Based on your profession, you might also be entitled to special ways to pay off your student loan debt or even get loan forgiveness.
Have you ever re-certified your income for an income-driven repayment plan? What was your experience like? We would love to hear about your thoughts in the comments below.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.