Dept of Ed. Extends IDR Recertification Again

Earlier this year, millions of student loan borrowers were notified by their servicers that they needed to recertify their income for their income-driven repayment (IDR) plan, but now Federal Student Aid is telling borrowers to hold on. When federal student loan payments were paused during the Covid-19 pandemic, IDR income recertifications were similarly put on hold. With payments starting back up last October, it was only a matter of time until recertification followed suit, but they’re not resuming as soon as you think.

Ignore Your Student Loan Servicer…Just This Once

If you were among those notified that you needed to recertify your income, you don’t actually need to do anything. The Department of Education has extended the recertification deadline until November 1, 2024 and the earliest that borrowers should need to submit anything will be September 2024. Student loan servicers are required to send ample communication to borrowers about their income recertifications, so you should expect to hear from them: 

• 3 months before: Your servicer reaches out to you about recertifying your IDR plan.
• 35 days before: Your income information is due. If you miss this deadline, your next billing statement might not reflect the information you provide.
• 10 days before: Last date you can turn in your income documents. If you miss this deadline, you’ll be taken off your IDR plan and put onto a different plan, which means that your monthly payment amount will no longer be based on your income and will likely increase.

According to studentaid.gov, if you:

• Didn’t Recertify Already
  • Your monthly payment might have increased, but FSA is working to revert your monthly payment to its previous monthly amount until your new recertification deadline.
• Recertified and Your Payment Went Up
  • FSA will return you to your previous monthly payment amount until your new recertification deadline.
• Recertified and Your Payment Went Down or Stayed the Same
  • FSA won’t make any changes to your monthly payment amount.

We have already worked with some clients who have struggled with their servicers around the recertification (ahem… looking at you, MOHELA). They were told that they need to make a “manual request” to take advantage of the recent extension. According to FSA, that should not be the case. If you already recertified and your payment went up, however, you may want to talk to your servicer to request they reverse the recertification and apply the prior payment amount to your account.

If you have any questions about income recertification, especially as it relates to the extension and any concerns you may have with your servicer, give your student loan professional a call. We have spent many hours on the phone over this issue already and don’t expect servicers to resolve it quickly. Remember, we’re only a phone call or email away, and no bad hold music!