On December 23, 2011, I received a notice that my IBR loan payment would go up over 500% if I didn’t submit an alternative documentation of income form within 30 days (my previous alternative documentation of income was submitted in Feb or March, 2011). The notice informed me that this was because of tax information submitted to the Dept of Ed by the IRS, which would have been based on my 2010 private law firm income. Since I’m now working in public service, I very promptly submitted an alternative documentation of income form. The form arrived at the appropriate address almost 3 weeks before it was due.

I called to check on the form on January 18, 2012, and discovered that it was “processing.” I was informed that the extraorbitant debit was already set in motion and that there was nothing I could do to stop it. After speaking with a supervisor, I was told that placing my account in forbearance would stop the debit and allow time for the income documentation to process. I agreed to this, and was told that I could make payments on my own during this time if I chose to.

However, I can’t find any information about whether or not these good faith payments would qualify for the PSLF 120. I suspect that they won’t, but I’m looking for confirmation either way.

Sorry about the detailed post, but part of me is curious to see if anyone else had a similar experience with a sudden and huge payment increase at the end of the year after switching jobs into public service.

Perhaps you can convince your servicer to give you credit for a qualifying payment, but my understanding of the regulations is that a loan must be either be in a repayment status (so not forbearance) and the payment must be made under IBR, ICR, or standard 10-year repayment plan, OR the payment must be for at least as much as the amount due under standard 10-year repayment.  That amount can be really high for borrowers with lots of debt.  FYI, the negotiated rulemaking committee is currently considering an issue related to timing of documentation of income, and we’re asking for some sort of grace period for borrowers to get their income documentation in before a payment jumps.