Hi Heather,

I’m wondering how often a borrower needs to update their income information under the IBR plan. I’m a 2011 graduate who consolidated all my loans right after graduation and selected the IBR plan. Since I wasn’t employed at the time, my IBR payment was zero. Now I have a temporary job that’s only going to last two months, but I’ll have an income for that short time period. Do I need to update my income info to have my monthly payment recalculated, and then change it again at the end of the temporary employment once I lose that source of income? Some of the documentation for the IBR seems to say that recalculations are only done annually, but the alternative documentation of income form says it should be used when income has recently changed. If I do have to report my income change now, does that risk having my monthly payment for the next year be based on the temporary salary?

Thanks!

I’ve never gotten a totally clear answer about whether borrowers have an affirmative duty to notify lenders of an increase income but my understanding of the way it works in practice is that loan holders only want to review income annually.  Borrowers whose income significantly decreases well before the regularly scheduled annual review can request that their loan holder use alternative documentation, and may in their discretion adjust required monthly IBR payment at other times during the year.

Also bear in mind that it is the annual income that is assessed, and changes in work circumstances over the course of the entire year affect that.