Hi Heather—

I’ve been enrolled in IBR since 2009.  When I needed to reapply in Oct. 2012, I realized that my 2011 tax numbers would be horribly misleading about my current income.  My husband and I got married in 2011, and our 2012 income is less than half of 2011.  We are both freelancers, so our income can vary a lot.  Applying with our 2011 income would result in IBR payments that we could absolutely not afford.

So I applied to my loan provider with the Alternative Documentation of Income form.  I meticulously outlined our entire (meager) 2012 income, sent copies of paystubs and printouts from accountants, and so on.  I included a letter explaining that we’re both freelancers, and that my income is a slow trickle and my husband’s is sporadic but larger.  And then my application was rejected with the statement that they couldn’t determine our “frequency of pay.”  And of course they immediately sent me a bill for my next standard repayment (with a late fee, naturally.)

When I got on the phone with my loan provider, the person I spoke to couldn’t begin to figure out what I was talking about, and finally offered to resubmit my application as an “IBR research request.”  She told me this would take thirty days to process, and that in the meantime, I still have to pay the (large) standard payment that is due on Jan. 14.  We can’t afford this payment, but I don’t want to be delinquent.  The customer service person told me that she can’t put my account in forbearance, because it’ll cause the IBR application to be rejected.

So what do you think I should do?  Can I try to get some sort of administrative forbearance?  Should I just hope that the “research request” goes through before my late payment becomes a problem?  Or should I just put the account in forbearance and reapply for IBR once we have our 2012 taxes done and I can just submit my AGI?  And will any of these options cause me to be unenrolled from IBR?  Now that I’ve clocked those three years in the program, I really want to keep going toward the 25, because I may really need that loan forgiveness down the road.

Thanks so much for your help.

Administrative forbearance is routinely granted, yes.

Keep communicating IN WRITING with your servicer.  Work to 1) document your current income to your servicer’s satisfaction (ask what they want, think creatively, consider writing up an affidavit?) and 2) ensure that your servicer is using that accurate income figure (don’t assume that they are, demonstrate your AGI not net, ask specifically what figure they are using, etc.). 

If you can’t get this straightened out, consider working through the student loan ombudsman.

Let us know how it goes.