Why re-certify your income driven repayment program?

The five minutes it takes to re-certify your IDR program means you can:

  1. AVOID CAPITALIZATION – this is where unpaid interest is added to your principle. From that point on the interest accruing on your loan is higher.

Ex: For my loan this would be around $3,000 in interest, for Braden’s loan this would be $6,000 in interest which would be added to the principle. This means we would pay ~$500 more in interest each year.

  • Follow the rules required to qualify for Public Service Loan Forgiveness

Per the email sent by my loan servicer

  • “If you do not renew by the deadline, your loans in REPAYE will be placed into the REPAYE alternative plan. In this alternative plan, your monthly payment may change to an estimated $2,955.06 and any unpaid interest will be capitalized, or added to your principle balance, after your renewal date has passed.” This is a change from the $0 current monthly payments.
  • “Payments made on the REPAYE alternative plan do not count toward Public Service Loan Forgiveness”
  • “If you don’t renew by the deadline and later want to re-enter REPAYE, your REPAYE monthly payment may increase”

Note: If you forget and re-enter REPAYE – it WILL increase because you likely have unpaid interest which will capitalize!

To re-certify my income driven repayment program, I went to studentaid.gov, logged in, and clicked on the link that said, “re-certify or apply for IDR program”. It pulled my tax information from the IRS page and in about five minutes I was done. It gave me a reference ID which Braden used to cosign my Income Driven Repayment Program request which verified his income as well (given that REPAYE takes your spouse’s income into account regardless of tax filing status.

Because we chose to consolidate our loans our IDR re-certification is closer to medical school graduation. For those persons who applied closer to when the grace period was up, it will likely be in November or December when you need to re-certify. Set a few reminders so you don’t forget!

Did you know you needed to re-certify each year?