Student loan borrowers may save money with IDR recertification extension on repayment plan

Student loan borrowers in an income-driven repayment plan will get to keep lower monthly payments a little longer because the deadline to recertify your income has been pushed back.

The Department of Education (ED) said IDR borrowers won't have to recertify their incomes, or provide their latest income information, until "late September 2024, at the earliest." Previously, ED said recertification could come as soon as March 1. Annual recertification is typically within a year of choosing an IDR plan as one of your repayment options, so borrowers’ recertification dates vary.

The delay means monthly payments will likely stay relatively low. Monthly IDR payments are based on a borrower’s annual income, and borrowers haven’t had to recertify income since before the pandemic. That means many borrowers on any IDR plan are making payments based on their 2019 income. Most borrowers likely have higher income now after the past two years of high inflation and a strong jobs market.

The extension is “part of our continued support for borrowers as they return to repaying student loans,” ED said.

What if I’ve already recertified?

Many borrowers likely received notifications from their loan servicers over the past few months and may have already recertified.

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If you recertified and your payment rose, “we will return you to your previous monthly payment amount until your new recertification deadline,” ED said.

If your payment remained the same or dropped, ED won’t touch it.

What if I missed my recertification deadline?

If you were supposed to recertify in March but missed your deadline, you may have been moved off your IDR plan and placed on an alternative payment plan not based on income. Your payments may have then risen, ED said.

If that happened to you, “we’re working to revert your monthly payment to its previous monthly amount until your new recertification deadline,” ED said.

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Timeline for recertification

Counting back from your official recertification date, or when your IDR plan expires, ED says you should expect:

• 3 months before: Your loan 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.

For example, if your IDR anniversary date is Nov. 1, you’ll first hear from your servicer about recertifying in August. Then your income information will be due Sept. 25, and the absolute latest you can turn in your information will be Oct. 22, before you’re placed on a different payment plan.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.