Consolidation and Alternative Documentation of Income

[TMP-SMX]

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I'm in the process of starting the application for consolidating my FFEL loans to direct loans. Has anyone completed the application with just giving the 2010 tax amount (the AGI from one of the first pages) or is everyone putting in their likely 2011 AGI based on half of the 2011-2012 year income? There's a pretty wide difference in how much I'll end up paying. (If I didn't consolidate I've already been informed that my two years of direct loans will have a payment of 0 on IBR because I have a family of three and my wife has very little income. They based the payments on my 2010 tax). The difference between the 2010 tax calculation for IBR vs. half of the year (2011 tax) will make it to be around $50 a month. Obviously not a big difference but I'm curious which one I should do.

 

[goodoldalky]

From the application:

You must list all taxable income you are currently receiving (i.e., income from employment, unemployment income, dividend income, interest income, tips, alimony). Include the amount of money received, how often you receive this money, and your employer (if any) or the source of your income if you are not employed. You must attach supporting documentation for all income reported in this section

YOU ARE REQUIRED to complete this form if you are repaying your Direct Loan(s) under the ICR or IBR Plan and:
◦You are in your first year of repayment;
◦You are in your second year of repayment and have been notified that alternative documentation of your income is required; or

◦You have been notified that the Internal Revenue Service (IRS) is unable to provide the U.S. Department of Education with your Adjusted Gross Income (AGI) or that of your spouse (if applicable).



From what I am reading, you are not permitted to use last year's tax return if you are doing ICR/IBR and you are in your first year of repayment. You MUST submit current ADI.