Payment Plans: Whozits and whatzits?

Have you ever noticed that the student loan world is overflowing with acronyms? There’s IBR, ICR, IDR, PAYE, REPAYE, and those are just the payment plans! Add to that the slews of special terms the government uses, and you have “whozits and whatzits galore…” It can be confusing trying to negotiate all the alphabet soup out there when you’re trying to figure out what steps you need to take towards repayment, much less PSLF (yet another acronym!)…

So, once you’ve waded through all the acronyms and jargon, finally figuring out which plan you’re on; everything is set, right? No more thingamabobs to deal with? Unfortunately, there are a couple of very important terms you have to grapple with every single year: income recertification and employer certification.

Income recertification must be completed by everyone that is on an income-driven repayment plan.

It’s how the government determines which plan(s) you qualify for and how much your monthly payment will be. It must be completed annually and comes with a deadline set by your loan servicer (they will notify you when that date is). If you fail to recertify by that date, it can have dire ramifications, such as being placed on an non-IDR plan or a plan that doesn’t qualify for PSLF (if you are going that route).

Employer certification is only for those who are pursuing PSLF and can be completed at any time.

This is done using the same form that is submitted for the final loan forgiveness. Every time that you submit it, the government audits your eligibility for PSLF and will notify you how many qualifying payments you have made. This is how the government tracks whether your employer qualifies you for PSLF; so we recommend that you do it at least annually to keep a paper trail.

It’s easy to go adrift in the sea of terms surrounding student loans. Income recertification and employer certification are two that we most often see misunderstood, but have important differences. If the alphabet soup has you reeling, let us help. We’re used to navigating these muddy waters, it’s all just part of our world.