6

From my understanding, income based repayment for federal student loans is based off of my yearly income. How does it work if I am self-employed and don't have a steady and predictable paycheck every month?

4

If you're self-employed they'll typically base repayment amounts on your income as shown on prior year tax-return. You re-certify your income annually with your loan servicer, but you can ask your loan servicer to recalculate your payment at any time. You do this by submitting a new application for IBR, and under 'reason for application' you'll indicate that you want a payment recalculation.

To stray from prior year income when self-employed, they'll need documentation of current income, this could be a copy of your ledger or other, you'll have to discuss supporting documentation with your loan servicer.

Here's a good article on Income-driven repayment plans.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.