Tips for successfully applying for an income-driven repayment plan


Given the SARS-CoV-2 pandemic, you might find yourself one day trying to choose between paying for food and utilities and your federal student loan. The good news is that federal loans owned by the U.S. Department of Education (ED) are under administrative forbearance until September 30, 2020. What happens after that date is still unknown. The forbearance period might not renew. Additionally, you might not have a job or receive the same wages you’re receiving right now. An income-driven/income-based repayment plan can help ease some of the financial strain. Yet, many borrowers have difficulty with the application and often initially deal with rejection. These tips can help make the entire process easier:

Think about interest

Before you even apply for an income-driven repayment plan, consider all potential options available to you, including non-administrative forbearance and deferral. Ask a representative from the loan servicing company to help you estimate your monthly payment under an income-driven plan as compared to the other options, compare short-term and long-term costs for each program, and then choose your plan. 

Keep the representative on the phone

Ask the representative to walk you through the application step-by-step. If you’re facing default and find out that a rejection or delay has occurred because the representative gave you the wrong information, you can usually negotiate additional time to redo the application while facing default. Loan servicing companies have administrative forbearance options.

Write your letter verbatim

If you’re required to ask for the repayment plan option formally in a letter, ask the representative to tell you exactly what to write. Why? Some applicants receive a denial/rejection for no other reason than their letters contained or failed to contain specific key words that automatically prompt a denial or approval, respectively. 

Follow up immediately

Never assume that the company overseeing your loan received your application via email or fax. Even if you receive an email receipt or fax confirmation email or text message, call the company later that same day or the next day to confirm that they received every page and that the content is correct. This is the best way to prevent both delays and denials/rejections.

For more information about this or another student loan topic or help understanding or completing an application, contact a member of our Student Loanify team today.