If you’ve been following this blog, then you know all about the complete mess surrounding IBR applications and annual recertification. If you’re a federal student loan borrower, you may have already experienced the joys of this maddening process, and even I wasn’t immune to the dysfunction. Luckily, my problem has been resolved (whew).

Well, there might be a solution on the horizon. The U.S. Dept. of Education has announced the creation of an electronic application and annual recertification process for income-sensitive repayment programs includingIncome-Based Repayment (IBR), Income-Contingent Repayment (ICR), and the new Pay As You Earn (PAYE)program. This would, theoretically, eliminate some of the mistakes caused by the current paper process (such as, oh I don’t know, pages being lost or misplaced) by allowing a borrower to submit everything online. The application would also allow the borrower to link to the federal student loan database and to the IRS to access information on your taxable income and family size, which is used to calculate your payment. This application option should start to be phased in to federal loan servicing this year, I believe.

My initial reaction can be summed up in two words: cautious optimism. I applaud the Department’s efforts to address what can only be described as a holy mess of a bureaucracy that not only inconveniences borrowers, but can actually wind up costing them a lot of money. That said, I’m sure there will be bugs, and I can only imagine what new nightmares await borrowers who are simply trying to do the right thing and pay back their loans. We’ll see.

Click here to read more about the new Electronic IBR Application Process.