New Pilot Programs Starting On Recertification Notifications For Certain Borrowers In Income-Driven Repayment Plans

By Karen McCarthy, Policy & Federal Relations Staff

The Department of Education (ED) will kick off a new pilot study during the week of May 18 that will attempt to “improve communication to borrowers in income-driven repayment plans and ensure a smooth, on-time renewal process,” in accordance with President Obama’s Student Aid Bill of Rights.

As previously reported by NASFAA, the pilot will test the effects of emails sent to borrowers from ED, in addition to currently required servicer notifications, reminding them to renew their income-driven repayment plan income documentation and family size, along with a link to the income-driven repayment (IDR) plan application. 

ED will email cohorts of borrowers with IDR anniversary dates in July. The email will originate from an ED email address, contain ED’s logo, and will be signed by Cynthia Battle, an ED official. The name of the student’s servicer will be listed at the bottom of the email.

Borrowers are randomly assigned to one of four test groups tied to the exact language of the email text. The text variations are designed to test the effects of specifying a renewal deadline date and including a borrower-specific monthly payment if the borrower fails to recertify income and family size on time.

According to data from the six largest federal servicers from November 2013 to October 2014, more than 56 percent of borrowers in IDR plans did not recertify their income and family size on time, ED officials said. About 31 percent of late certifiers “went into a hardship related forbearance or deferment” after missing the deadline. 


Publication Date: 5/11/2015

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