If someone has a big drop in income, like becoming unemployed or entering a year-long service program with a minimal stipend, when does IBR payment get recalculated?  Is it not until they file a new tax form in the new calendar year, which even then would reflect part of the year with the different income stream?  Is there any way to address a temporary drop in income?

Thanks,
Charles
Lutheran Volunteer Corps

That depends.  The borrower may submit an Alternative Documentation of Income Form to demonstrate their change in circumstances and should be able to trigger an alteration of the amount due.  I’ve yet to see if this actually works the way it ought to.  Also, there are four different servicers of Federal Direct Loans.  There is some indication that they may institute different schedules.  Everyone should have their payment adjusted annually in any event.

Sorry this isn’t more clear.