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How Do You Recertify Income-Based Repayment?

You can recertify your income-based repayment plan with a paper form, but it’s smart to complete the process online and as early as possible.
April 26, 2019
Loans, Student Loans
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All federal student loan borrowers using income-driven repayment plans must resubmit information about their income and family size annually — even if nothing has changed. This process is known as recertification, and it can increase or decrease your payments for the next year.

Submit your recertification request online at studentloans.gov when your servicer first tells you the deadline. There’s no financial benefit to waiting if you’re worried about rising bills; updated payments don’t go into effect until your previous annual repayment period ends.

Here’s what to know about how to recertify income-based repayment, including what happens if you miss your recertification deadline.

» MORE: Income-driven repayment: Which plan is right for you?

When is your recertification deadline?

Your student loan servicer is required to let you know when your recertification paperwork is due. It’s smart to complete the process when you first learn this date, even if it’s months before your actual deadline. This will ensure you don’t forget to recertify and your servicer gets everything it needs in time.

Your annual recertification deadline will likely align with when you entered your income-driven plan. You must submit everything within 10 days following this deadline.

If you choose to wait, set a reminder for your recertification date. Contact your servicer if you aren’t sure when it is. Your annual recertification deadline will likely align with when you entered your income-driven plan. You must submit your paperwork within 10 days following this deadline.

How to recertify your information

You can recertify Income-Based Repayment and the three other income-driven repayment plans either at studentloans.gov or by sending a paper form to your servicers. You’ll provide the same kind of information as when you initially applied for income-driven repayment:

  • Your family size.
  • Your most recent federal income tax return or tax transcript.
  • Alternate proof of any taxable income, like pay stubs, if you didn’t file taxes.
  • A signed statement explaining your income, if no documentation is available.

Recertifying online is typically faster and easier. Studentloans.gov offers online access to your tax records via the IRS Data Retrieval Tool, shares your request with multiple servicers (if you have them) and confirms your request via email. Having that digital trail may prove handy if your servicer says it hasn’t received your information.

What happens if you forget to recertify?

If you miss your recertification deadline, you can enroll again in your plan or resume making payments based on your income by providing your servicer with updated information. This won’t undo any penalties that have already occurred, though.

The penalties depend on the income-driven plan you use. The following can happen:

For all plans, your payments will no longer be based on your income. Instead, you’ll usually switch to a standard, 10-year repayment plan, with fixed monthly payments based on the amount you owed when you first entered income-driven repayment.

Revised Pay As You Earn, or REPAYE, is the exception. Failing to recertify under REPAYE will place you into an alternative repayment plan. Your payments in this plan will be based on whichever of the following repayment terms pays off your remaining balance the fastest:

  • Ten years from when you enter the alternative payment plan.
  • The remainder of your current 20- or 25-year REPAYE term.
  • If you plan to restart income-driven payments and can’t afford the higher amounts in the meantime, you can pause payments temporarily with forbearance. This will prevent your loans from becoming delinquent but increases the amount you owe because interest will accrue during this postponement.

    If you make automatic payments, missing your recertification deadline can lead to payments taking a bigger chunk out of your bank account than you expected.

    For example, let’s say you owed $30,000 at 4% interest when you enrolled in Pay As You Earn, or PAYE. With a discretionary income of $40,000 and a family size of one, you would pay $177 each month under PAYE. But if you didn’t recertify, you would now owe the standard amount of $304 a month.

    If you autopay, that $304 might be taken out of your bank account before you realize your plan has changed. Depending on how you manage your money, the withdrawal could lead to overdraft and other bank fees.

    For every plan except Income-Contingent Repayment, unpaid interest is capitalized — added to your principal balance — if you don’t recertify your information by your annual deadline.

    Income-driven payments tend to cover less of the interest accruing on your loans since they can be as low as $0. Some income-driven repayment plans partially subsidize interest costs, but this typically lasts for the first three years of the plan only.

    If you’ve been on your plan for a while, you may owe a good deal of interest. Tacking that onto your balance will increase how much you pay because future interest will now accrue on a larger amount.

    Some borrowers may recertify their incomes but forget to confirm their family sizes. If you do this, you’ll continue to make payments based on your income. However, your servicer will use a family size of one to calculate your income-driven payments.

    If your previous payment was based on a larger family size, your new payment will be higher. If that amount increases so much that it becomes more than the standard payment, you would no longer qualify for Income-Based Repayment or PAYE if you were using either plan. Losing that eligibility would result in unpaid interest being capitalized, or added to your principal.

    Can you recertify student loans early?

    If you need a lower payment right now because life happened — you lost your job or had a child, for example — you can recertify income-based repayment early and ask for an immediate payment adjustment.

    If you recertify early, the process is the same. Just select the option for an immediate adjustment instead of annual recertification on your request. Otherwise, your new payment won’t go into effect until your current annual payment period ends.

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