Income-driven repayment plans (IDRs) for federal student loans are often a financial lifeline to those who need them most. IDRs can mean the difference between defaulting and being in good standing with a loan. But so many borrowers leave their IDRs—and not necessarily on purpose. Ameritech Financial, a private document preparation company that helps borrowers apply for federal repayment plans, also helps clients stay enrolled in IDRs for as long as the plans are needed.
“Helping people navigate IDRs is at the core of what we do at Ameritech Financial,” said Tom Knickerbocker, Executive Vice President at Ameritech Financial. “And we don’t just enroll our clients and let them go. We stay with them so they don’t miss any future deadlines.”
The Department of Education offers several income-driven repayment plans. These plans base monthly loan payments on borrowers’ income and family size. After 20 or 25 years of repayment, any remaining balance is forgiven. However, the plan requires yearly recertification.
More than half of all borrowers in IDRs in a data set from 2014 failed to recertify on time, the Department of Education reported. Missing recertification results in a switch back to the Standard repayment plan, which often means much higher payments, and triggers interest capitalization, both of which could be a big financial burden on borrowers by increasing the amount and time they pay on their loans.
Failure to recertify might happen for a variety of reasons. Perhaps the borrower was doing better financially and no longer needed the plan. But given that over 17 percent of lapsed IDR recipients in the data set went into a hardship-related forbearance or deferment, that’s not the case for everyone. The recent rise in defaults—with possibly more coming—also signals that more individuals may not be getting the support they need to stay current on their loan.
Borrowers may also simply forget that they had to recertify or misunderstand the paperwork involved. Some lapsed borrowers in the Education Department’s data set (around eight percent) did successfully recertify one month after their deadline. But as the months go on, progressively fewer lapsed borrowers recertified, petering out to less than one percent in the sixth month after the deadline.
Thankfully, clients of Ameritech Financial don’t have to worry about forgetting about their recertification, misunderstanding the paperwork, or filling it out incorrectly. First, Ameritech Financial will assist clients in identifying and applying for an IDR. Once clients are enrolled, Ameritech Financial assists in monitoring the plan, notifies borrowers of any upcoming deadlines, and helps them with the entire process of recertification. Ameritech Financial will assist with this yearly process for as long as needed.
“Even though so many borrowers need to stay in their IDRs, they aren’t getting the resources they need to do so,” said Knickerbocker. “Ameritech Financial is filling a gap and helping borrowers so they’re on top of their deadlines and in control of their student loan situation.”
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.
Ameritech Financial is a member of the Association for Student Loan Relief (AFSLR), and each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional Customer Service.
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