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IDR Calculation

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  • IDR Calculation

    My wife just did her annual recertification which was based on our most recent tax return. However, last year we had 1099 income which was a large % if household income, but for the next 12 months we won’t have said income anymore. Therefore, her recertification produced a number for her minimum payment which is a lot larger than we can comfortably pay. Is there any way to contact FSAID and explain this to have her payment lowered or changed? I understand they are looking at our recent AGI but again, we won’t have a very large percentage of that for this current year.

  • #2
    Yep, you have the opportunity to plead your case - then it’s up to them to determine if your income has truly “substantially changed”. Could they determine you owe more this year since you technically understated your income the prior year? Yep. it’s totally possible they say ‘tough luck’ since your payments were lower last year while you had increased your income. I suspect without having gone through this process myself that they will say you owe what you owe, but next year you can lower that payment when AGI goes down again.

    both nelnet and fedloan have essentially the same below wording on their website:

    “If your income has significantly changed since you last filed or you have not filed a federal income tax return in the last 2 years, alternative income documentation can be used. Any of the below are acceptable documentation of income as long as they are less than 90 days old.
    • Pay stubs

    NOTE: Make sure you write the frequency of pay (weekly, biweekly) if it isn't clearly stated.
    • Certified letter or statement from an employer
    • Proof of self-employment

    Please do not send in your year-end W-2.

    For PAYE, IBR, or ICR, if you file a joint tax return with your spouse and either of your income has significantly changed, alternative documentation of income, for both you and your spouse is required. If you are separated or unable to reasonably access your spouse's income information, only your income is required.

    FOR REPAYE, if you are married and either you or your spouse's income has significantly changed, alternative documentation of both your incomes is required, regardless of how you file your taxes. If you are separated or unable to reasonably access your spouse's income information, only your income is required.”


    • #3
      Question: when I re-certified last year and it asked if my income had changed, it specifically mentioned losing a job or getting a pay cut. What do you do when you just started attendinghood (as in half the year last year was trainee money and you had only a few months of attending pay on your 2019 taxes)? Your total annual income has gone up come January since no more trainee pay for half the year, but your monthly salary was technically the same as the last few months of 2019.