Publication Date: December 19, 2012
Subject: Approval of Income-Based/Pay As You Earn/Income-Contingent Repayment Plan Request Form
Summary: This letter announces the approval of the form Direct Loan and FFEL borrowers will use to request an income-driven repayment plan and provides guidance on the implementation of the form.
The Office of Management and Budget (OMB) has approved an Income-Based Repayment (IBR) Plan/Pay As You Earn Plan/Income-Contingent Repayment (ICR) Plan Request form for the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program. The form has been approved under OMB Control Number 1845-0102 and has an expiration date of 11/31/2015.
Use of the IBR/Pay As You Earn/ICR Form and Impact on Other Forms
Prior to this form's approval, Direct Loan and FFEL borrowers used the following forms to request a repayment plan with a monthly repayment amount based on income ("income-driven repayment plan"):
- 1845-0014 – Direct Loan Repayment Plan Selection form;
- 1845-0016 – Direct Loan ICR Plan & IBR Plan Alternative Documentation of Income form;
- 1845-0102 – FFEL Program IBR Plan Request; and
- 1845-0102 – FFEL Program IBR Alternative Documentation of Income form
The previously approved versions of the FFEL Program IBR Plan Request and Alternative Documentation of Income forms (1845-0102) have been replaced with the new combined IBR/Pay As You Earn/ICR Request form (1845-0102). In addition, the Direct Loan Alternative Documentation of Income form (1845-0016) is no longer necessary and will no longer be used. Finally, the Direct Loan Repayment Plan Selection form (1845-0014) has been modified by removing the borrower's option to request an income-driven repayment plan. Direct Loan borrowers must now request an income-driven repayment plan by using the new IBR/Pay As You Earn/ICR Request form (1845-0102). The Direct Loan Repayment Plan Selection form (1845-0014) can now only be used only to request the Standard, Graduated, or Extended repayment plans.
Features of the IBR/Pay As You Earn/ICR Request Form
Item 1 of the new IBR/Pay As You Earn/ICR Request form presents borrowers with check boxes to indicate the reason that they are submitting the form. Specifically, borrowers may indicate that they are submitting the form to:
- Request an income-driven repayment plan or request a change to their income-driven repayment plan (e.g., changing from the IBR to Pay As You Earn plan);
- Submit annual documentation for the recalculation of their monthly payment amount under their current repayment plan; or
- Request that their loan holder recalculate the monthly payment amount because the borrower's circumstances have changed.
Item 2 of the new IBR/Pay As You Earn/ICR Request form presents borrowers with check boxes to indicate which of the three income-driven repayment plans they are requesting. The form also includes a fourth check box for borrowers who wish to repay their loans under an income-driven repayment plan, but are unsure which of the plans will provide the lowest monthly payment amount. By checking this box, the borrower may request to be placed on the income-driven plan he or she is eligible for and that provides the lowest monthly payment amount.
The new IBR/Pay As You Earn/ICR Request form relies on skip logic to make the form easy to complete, particularly with regard to determining whether alternative documentation of income is required. Section 4 of the form asks two questions that determine whether the borrower is required to submit alternative documentation of income.
Item 8 asks whether the borrower has filed a federal income tax return for the two most recently completed tax years. If the answer is "No" the borrower is required to provide alternative documentation of income. If the answer is "Yes" the borrower is directed to proceed to the next question.
Item 9 asks if the borrower's current income (or, if applicable, the borrower's spouse's current income) is significantly different from the income used to calculate the borrower's Adjusted Gross Income (AGI) on the borrower's most recently filed federal income tax return. If the answer is "Yes" the borrower is required to provide alternative documentation of income. If the answer is "No" the borrower is directed to submit documentation of AGI.
If a borrower is required to submit alternative documentation of income, the form directs the borrower to a section of the form devoted to alternative documentation of income (Section 5).
Finally, if the borrower (or, if applicable, the borrower's spouse) has no taxable income, as indicated by a response of "No" to Items 10 or 11, no additional documentation is required. A "No" response to those questions serves as a self-certification that the borrower or spouse does not have any taxable income.
Implementation and Transition to New Forms
FFEL Program lenders and lender/servicers may begin distributing the attached OMB-approved form to borrowers immediately. However, beginning April 1, 2013, only the revised form with the 7/31/2015 expiration date may be provided to borrowers. The previous versions of the form may be accepted from borrowers through April 30, 2013.
The IBR/Pay As You Earn/ICR Request form has been adapted for use on the Department's StudentLoans.gov Web site, and will be available for borrowers starting December 21, 2012. An Electronic Announcement with details about this form's use via StudentLoans.gov is forthcoming.
To accommodate imaging technology, the attached form requires the borrower to complete and sign the form in ink. However, a pencil signature does not invalidate a form.
The new form is available in Microsoft Word and PDF format as an attachment to this letter. No changes to, deletions from, or additions to the language of the attached document are permitted. The IBR/Pay As You Earn/ICR Request form must be printed using black ink on white paper. The typeface, point size, and general presentation of the form may not be changed. Program participants should pre-print their name and address and provide a contact number in the section of each form that tells the borrower where to send the completed request. Space at the top, bottom, or sides of the form may be used for bar coding.
Jeff Baker, Director
Policy Liaison and Implementation
Federal Student Aid
U.S. Department of Education