My wife and I file taxes jointly and both work for government, so we are both in the process of certifying our loan payments for PSLF and are each on IBR.  We each have individually high debt ($120,000+) due to undergrad and graduate school.  Because we file jointly, both of our incomes and both of our debt levels are factored into our payments and IBR eligibility.

I am about to start another (fed government) job making substantially more money (approximately $35,000 more per year).  Being in public service and filing jointly, we know that my raise in income is going to increase both of our loan payments pretty significantly, probably by hundreds of dollars.

Here’s my question: if I don’t report my new income until I do my annual re-certification for IBR/PSLF purposes (in about 4-5 months), rather than right away, can the loan servicer penalize me or “reach back” and attempt to collect money because my loan payments from the date of hire at the new higher paying job would have been higher if I reported the job change immediately?  (As a counter-example, obviously if you moved to a significantly LOWER paying job, you would want to report it immediately, to obtain lower IBR monthly payments).

I’m certainly not trying to hide anything (which would be impossible, since they’ll be able to simply look at my tax return info), but I don’t want to be surprised when FedLoan reaches back and tries to collect thousands of dollars because I should have reported my higher income immediately.

Anyone have any experience with that kind of situation?  Thanks.

I am also very interested in learning the answer to this question.

I haven’t had experience with the situation, but I don’t think they can “reach back”.

They base your IBR payment off your previous year’s return.  When you reapply, you are linked to the IRS site where you give them your tax info, and in 2-minutes your re-certification is done.  Pretty straightforward.

Now if you happened to take a lower paying job, that’s where the alternative documentation form comes into play.  That’s where you AGI from the previous year is higher than is currently represented, so you’d want to submit your documentation to receive your lower monthly payment.