American Financial Benefits Center: IDR Payments Can Increase or Decrease Based on Income But Should Still Be Manageable
EMERYVILLE, Calif., April 11, 2018 (Newswire.com) - Monthly federal student loan payments can be difficult to manage. Countless borrowers have found federal income-driven repayment plans (IDRs) useful in managing their loans. Such plans calculate payments as a percentage of discretionary income, which takes into consideration income and family size, and require recertification of income and family size each year or when either changes. These updates ensure that their payment stays as close as possible to the percentage of income prescribed by the particular IDR. American Financial Benefits Center (AFBC) is a private company that helps its clients with application paperwork pertaining to IDR enrollment. The company reminds borrowers that increased IDR payments after recertifying should not cause panic.
“It’s exciting to see a lower student loan payment when you first enroll in an IDR,” said Sara Molina, manager at AFBC. “But even when payments go up, borrowers shouldn’t necessarily worry. Any increases or changes are designed to align with borrowers’ situations so they stay manageable.”
Any increases or changes are designed to align with borrowers' situations so they stay manageable.
Sara Molina, Manager at AFBC
Depending on the IDR, payments will never go above 10 or 15 percent of discretionary income. For PAYE and IBR plans, borrowers will also never pay more than they would pay under the Standard Repayment plan. That means that if income increases enough that 10 percent (or 15 percent for loans taken out before 2014) of discretionary income is higher than the Standard payment, borrowers’ new payment amount is that of the Standard plan. However, such borrowers are still considered to be enrolled in an IDR and should continue to submit recertification paperwork each year or if income decreases.
Any increase in student loan payment may cause some degree of concern. Individuals may need to re-evaluate their finances to make sure they can cover their new payment amount. If borrowers notice a substantially higher payment amount, they should check on their loans in case they missed a recertification deadline or their loans were mistakenly removed from their IDR.
“At AFBC, we help our clients with the recertification process and paperwork by starting early and helping them get all the necessary information into the application,” said Molina. “We know how valuable IDRs can be to our clients and to other federal loan borrowers even if their income increases. It’s important that borrowers in IDRs don’t miss their recertification deadlines.”
About American Financial Benefits Center
American Financial Benefits Center is a document preparation company that helps clients apply for federal student loan repayment plans that fit their personal financial and student loan situation. Through its strict customer service guidelines, the company strives for the highest levels of honesty and integrity.
Each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Contact
To learn more about American Financial Benefits Center, please contact:
American Financial Benefits Center
1900 Powell Street #600
Emeryville, CA 94608
1-800-488-1490
info@afbcenter.com
Source: American Financial Benefits Center