More than 8 million federal student loan borrowers use income-driven repayment plans. These plans can drop payments to $0 based on a borrower’s income and family size. And after 20 or 25 years – 10 if you work in public service – any remaining balance is forgiven.
But to stay on these plans, you must recertify your personal information annually. Failing to do so can lead to consequences like increased payments, a bigger loan balance and, eventually, default.
Yet more than half of borrowers miss their deadlines, according to data from the Department of Education.
A new law addresses this issue by letting borrowers opt in to automatic recertification. James Kvaal, president of the nonprofit Institute for College Access & Success, expects this change to take months, not years, to implement.
“Borrowers should continue to watch for recertification requirements,” Kvaal says, “and when the opportunity comes to opt in, they should.”