Receiving a denial letter for your Income-Driven Repayment (IDR) application can be frustrating, but it does not necessarily mean you are out of options. There are several common reasons why an application may be denied, and in most cases the issue can be resolved. Here is what you should know and what to do next.
Common Reasons for an IDR Denial
Your loan servicer may deny your IDR application for a number of reasons, including:
- Missing or incomplete income documentation — Your application may not have included the required proof of income (such as a recent tax return, pay stub, or a self-certification if you have no income).
- Signature issues — Your application may have been rejected if the signature was typed rather than drawn electronically, or if a required field was left blank.
- Ineligible loan types — Certain loan types (such as some older default loan types pre-2008) may not be eligible for specific federal repayment plans without first being consolidated.
- Processing errors — Sometimes denials are the result of a servicer processing error, which can often be corrected by resubmitting.
Steps to Take After a Denial
- Review your denial letter carefully. Your loan servicer is required to explain the reason for the denial. Read the letter closely to identify exactly what issue needs to be addressed before reapplying.
- Gather the correct documentation. If the denial was due to missing or incorrect income documentation, collect the appropriate documents before reapplying. Acceptable income documentation typically includes your most recent federal tax return, recent pay stubs, or a signed statement if you currently have no income.
- Contact your Savi Expert. Reply to your open support ticket or reach out to the Savi team directly. We can review the denial reason with you, help you understand your options, and assist you in preparing a corrected application. If a new IDR application needs to be sent to you for signature, we will do that promptly.
- Sign your application correctly. When you receive a new application via Adobe Sign, please draw your signature using your trackpad or mouse — do not type it, as a typed signature will be rejected by your loan servicer.
- Resubmit your application. Once your application is complete and correctly signed, Savi will send it to your loan servicer on your behalf. Your servicer will typically place your loans in a processing forbearance for up to 60 days while they review it. Note that this processing forbearance counts toward PSLF, so you will not lose progress on your qualifying payment count during this time.
A Note on Loan Consolidation
If your denial was related to ineligible loan types, you may need to consolidate your loans before you can enroll in an IDR plan. Your Savi Expert can help you determine whether consolidation is the right next step for your situation and walk you through that process.
Still Have Questions?
Every borrower's situation is unique, and the Savi team is here to help. If you have received a denial letter and are unsure what to do next, please do not hesitate to reach out to us.