Income-driven repayment renewal dates
One of the most common questions recently asked by veterinarians in student loan repayment using any of the income-driven repayment plans (IBR, PAYE, REPAYE, ICR) is “When do I need to provide my income information again? Is it before the special pandemic forbearance benefits end? Is it after? How do I know?”
As with many questions on federal student loans, the answer is “It depends…” Thankfully, there is guidance from the Department of Education (ED) on how to determine the answer for your student loans.
During the forbearance period no one has been required to renew their income information for an income-driven repayment plan. From ED, “You won’t be required to recertify before payments restart, and the earliest you could be required to recertify is six months after the payment pause ends.”
When will the payment and interest pause end?
Officially, the end of the special forbearance period is scheduled to be 60 days after the Supreme Court decides the fate of the one-time cancellation benefits proposed by the Biden administration, or 60 days from June 30th 2023, whichever happens first.
Recently, the House passed a bill to raise the federal debt ceiling that also includes a provision to prevent any additional extension of payment and interest pause. That means, the latest it will last is “60 days after June 30th.” We’ll see by next week if the Senate also allows that provision to stand in the version they pass. If so, then there will be no more extensions of the pandemic forbearance benefits.
Whatever happens, no one will be required to provide updated income information until at least 2024.
We can help you refine your renewal date even further by looking at your federal student loan information more closely. VIN and VIN Foundation have done thousands of student loan physical exams for veterinarians and veterinary students. A student loan physical exam entails analyzing the information contained in your federal student aid data file. The easiest way to make sense of the data in this file is to upload it into the VIN Foundation My Student Loans tool. If you’re not sure what any of that means, head over to the My Student Loans page and review the instructions (including video) on how to find and upload your student aid data file.
You can also look for this information on your loan servicer website. However, I would highly recommend double-checking whatever you find there with your student aid file upload results in the My Student Loans tool. To put it bluntly, I don’t trust anything federal loan servicers say on income-driven repayment without verifying it. They have earned a less-than-stellar reputation by screwing up any and all things income-driven repayment related. It is amazing how many times we find inconsistencies between student aid data files and loan servicer information during the student loan physical exam. Like many of the conditions we deal with in veterinary medicine, more things are missed by not looking rather than not knowing. The good news is that you have a way to look! If you haven’t yet, it’s time for you to do a good student loan physical exam.
It’s time to perform a thorough student loan physical exam
We can help you refine your renewal date even further by looking at your federal student loan information more closely. VIN and VIN Foundation have done thousands of student loan physical exams for veterinarians and veterinary students.
A student loan physical exam entails analyzing the information contained in your federal student aid data file. The easiest way to make sense of the data in this file is to upload it into the VIN Foundation My Student Loans tool. If you’re not sure what any of that means, head over to the My Student Loans page and review the instructions (including video) on how to find and upload your federal student aid data file.
You can also look for this information on your loan servicer website. However, I would highly recommend double-checking whatever you find there with your results in the My Student Loans tool. To put it bluntly, I don’t trust anything federal loan servicers say on income-driven repayment without verifying it. They have earned a less-than-stellar reputation by screwing up any and all things income-driven repayment related.
It is amazing how many times we find inconsistencies between student aid data files and loan servicer information during the student loan physical exam. Like many of the conditions we deal with in veterinary medicine, more things are missed by not looking rather than not knowing. The good news is that you have a way to look! If you haven’t yet, it’s time for you to do a good student loan physical exam.
Income-Driven Repayment Renewal, aka Anniversary Date
After you upload your student aid file to the My Student Loans tool, choose any of the “Loan” tabs, and click the “Show Details” text to expand the view of your loans. This will reveal an “Anniversary Date” column. If your loans have been using an income-driven repayment plan, you will see a date listed. If your loans have not been using an income-driven repayment plan, you will not see a date listed in the Anniversary Date column.
Normally, this is the date by which you would need to provide updated income information to continue having your payment calculated as a percentage of your Discretionary Income. But nothing about the last three years of student loan repayment has been normal.
So what if…
What if my Anniversary Date shows any day in 2023?
Add one year to that date. Per Dept of ED guidance, “If your recertification date falls between now and six months after the pause ends, it will be pushed out by one year.” For example, if your Anniversary Date shows 5/12/2023, your new renewal date will be 5/12/2024. That means the minimum monthly payment currently listed in your student aid file (HINT: the Monthly Payment shown in the image above) will be the payment that resumes once the forbearance period ends until you’re next due to renew.
The only exception to this would be if your current income would generate a payment that is less than what your income-driven repayment plan shows now. Or maybe you discovered you should be using a different income-driven plan that would give you a lower monthly payment; in that case you can apply now (or before repayment resumes) to have your minimum monthly payment adjusted downwards.
What if my Anniversary Date shows a date in 2021 or 2022?
Keep adding one year to that date until you get beyond six months after the pause ends. This date should be your next income-driven renewal date. For example, in the graphic above, we see an Anniversary Date of 11/23/2022. We add one year to get to 11/23/2023. Since this date falls in the six month period after the pause will end, we add another year bringing the updated renewal date to 11/23/2024.
But we don’t know when the pause will end yet, right? True, but it is now June so we can get really close. For those of you who add a year(s) to your Anniversary Date and land on a day in January or February 2024, you’re going to need to pay close attention to when the forbearance benefits officially end. You will still have at least a 6 month “grace period” on renewing, but the final pause end date will determine if you’ll be one of the earliest folks to renew or if you’ll receive a whole extra year of minimum payments at your current level.
For example, let’s say you’ve added a year(s) to your Anniversary Date and it lands on February 10th, 2024. If the Supreme Court decides the fate of the cancellation benefits before June 15th, 2023, then the special forbearance period will end 60 days later (August 14th) and the earliest renewal date would be 6 months (180 days) later (February 10th, 2024). So you’ll be renewing early in 2024. But if that pause officially ends after June 15th, then you won’t be required to renew until early 2025 since your renewal date would get pushed out another year, February 10th, 2025 in this example.
Why does your Anniversary Date matter?
In the hundreds of posts made in the student debt message board area during the pandemic forbearance period by veterinarians in repayment, most had very low minimum monthly payments when the pause started. Some recent graduates have had zero minimum payments since they have graduated. The longer your payments are low or zero, the higher the chance you will reach forgiveness, particularly under a 20 year forgiveness plan like PAYE or IBR 2014.
Also be aware of new regulations taking effect this July 1st, the soon-to-expire one-time forgiveness count adjustment (last chance to benefit is 12/31/2023), and recently proposed changes to the income-driven plans (likely to take effect in 2024). These updates may significantly impact most borrowers. Get familiar with the changes and review their impacts on your loan repayment using the My Student Loans and Loan Repayment Simulator.
Even if your income has significantly increased since you obtained a low or zero payment, you should review your student loan details, run student loan simulations, and see if you’re still on track to reach forgiveness. If you are, great! Make sure you’re also planning for the potential tax on the forgiven balance. If you’re not, great! You can continue using your income-driven plan to set the minimum payment, and use your budget and other financial plans to see if it makes sense to accelerate your student loan payoff. All of that will depend on your current and anticipated family and financial circumstances.
The student debt-to-income ratio (DIR) is still a great guide. While changes to income-driven repayment will adjust some of the thresholds we’ve seen hold true for a while, a good indicator is still a DIR of one. If your taxable income does not exceed your income within a few years of graduation or after your advanced training, then you’re likely to benefit from student loan forgiveness.
More is missed by not looking than not knowing. It’s time to take a look.
And remember, we’re here to help:
If you need student debt help, reach out to VIN and VIN Foundation. We have free online tools like the VIN Foundation Student Debt Center and special message board areas to help you make sense of your options. If you have questions on any of the available tools and options, reach out to studentdebt@vinfoundation.org.
Dr. Tony Bartels graduated in 2012 from the Colorado State University combined MBA/DVM program and is an employee of the Veterinary Information Network (VIN) and a VIN Foundation Board member. He and his wife have more than $400,000 in veterinary-school debt that they manage using federal income-driven repayment plans. By necessity (and now obsession), his professional activities include researching and speaking on veterinary-student debt, providing guidance to colleagues on loan-repayment strategies and contributing to VIN Foundation initiatives.
1 thought on “I have federal student loans. When do I need to recertify my income?”
My anniversary date is October 24,2023. So my new date would be October 24, 2024?