This is Part 3 of my ongoing series documenting my own experience with Income-Based Repayment (IBR) annual re-certification. As many of you know, there have been widespread problems with the IBR re-certification process, so I am documenting my own experience to see if there’s any wisdom I can send to other borrowers going through the same thing. In Part 1 of this series, I had some major trouble getting a straight answer from my servicer regarding the month that I needed to re-certify my income to stay on IBR. In Part 2, after I received no reminder or notification from my servicer at all whatsoever, I contacted my servicer to request the appropriate forms and instructions to re-apply for IBR; I then submitted the appropriate documentation: the Repayment Plan Selection form, along with my most recent tax return showing my Adjusted Gross Income. I hoped for the best.
On December 11, 2012, I checked my online account and saw that despite my efforts, I have been kicked off of IBR and put onto the Standard repayment plan, resulting in a payment due at the end of December that is almost 5 times higher than it should be, and certainly something I cannot afford. I immediately called my servicer to find out what was going on. I was told that on November 30, my IBR application had been denied because I did not submit all the pages of my tax return. I was never notified about this, by email or by regular mail, and I never would have known about this if I had not called. If I had auto-debit and didn’t bother checking my account, I could be in for a real surprise. I also was not aware that my servicer needed my full tax return, as the Adjusted Gross Income figure (which is the basis for IBR) appears on the first page of my tax return. After speaking with a customer service representative, I was instructed to send in all the pages of my tax return by fax so that it can be processed quickly.
So, I will now be faxing over my full tax return (all pages). To be safe, I am also re-sending the Repayment Plan Selection form, along with a cover letter from me explaining the situation. I am, naturally, quite nervous that this won’t be processed in time for my December 28 billing date, which means I’ll either have to pay the higher amount, or go into temporary forbearance.
The federal loan servicing system is a complete mess. I am a student loan attorney, I know exactly what I am doing, and I have been totally proactive in trying to stay on top of this and do everything right. Despite my best efforts, I too have been kicked off of IBR and I am being billed an amount that is extraordinary. It shouldn’t be this hard. It shouldn’t be this stressful. This is ridiculous.
Stay tuned as the saga continues.