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Income-Driven Repayment FAQs

March 7, 2014

Would you like more guidance regarding Income-Driven Repayment plans? Here are some frequently asked borrower questions, with answers you can use!

1. Question: If a borrower did not file a federal tax return for the last two years, can they still apply for an Income-Driven Repayment plan?

Answer: Yes, if a borrower did not file a federal income tax return for either of the two most recently completed tax years, they will have to provide alternative documentation of income. Alternative documentation includes things like pay stubs or other statements from employers, bank statements, and dividend statements.

2. Question: A borrower’s current income has significantly decreased since they filed their taxes. What can they do to have their Income-Driven Repayment plan payment readjusted?

Answer: When a borrower’s most recent AGI does not reasonably reflect their current income, they should use the alternative documentation of income section to report their income. A borrower should inform their loan holder of the change in their financial circumstances and ask that the payment amount be recalculated.

3. Question: A borrower just received their dream job, and their income has significantly increased. Do they lose eligibility to repay under an Income-Driven Repayment plan?

Answer: No, the borrower will remain in the IDR plan for the life of their loan, unless they request to be taken out of it. If they no longer meet the criteria for Partial Financial Hardship, their payment amount will convert to a level payment amount that will remain the payment amount for the applicable repayment period.

If you have further questions, feel free to contact your Regional Director.

 

Nycci Parsons, Learning Engineer, Nelnet Partner Solutions

Nycci Parsons, Learning Engineer, Nelnet Partner Solutions

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