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DETERMINE INCOME CONTINGENT REPAYMENT (STUDENT
LOANS)
Agencies may require a contractor to perform some or all
of the tasks associated with determining the repayment amount
based on the borrower’s income, in accordance with agency guidelines,
for the loans the contractor is servicing. Agencies may issue
task orders that include requirements for this service which
contains services which are similar to the those described below.
A task order may require any combination of these services.
These services illustrate some of the types of tasks that the
contractor may be required to perform under this contract, but
this is not intended to be an all inclusive list. Rather, it
illustrates the types of services a contractor may provide.
When required, agencies may issue task orders
that include determining the repayment amount based on the borrower’s
income which may require, but are not limited to the following
types of tasks:
- Determine income contingent repayment (ICR) schedules
in accordance with ordering agency guidelines. Some agencies
may require the contractor to incorporate these guidelines
into the loan servicing system so that calculations can
be made automatically.
- When converting a loan to repayment status, send the borrower
any agency required forms regarding income contingent repayment
and, the release of income tax data, and obtain other information
necessary to calculate the monthly ICR payment amount.
- Image and review any waiver form returned by a borrower.
If the form is not correctly completed, the contractor may
be required to send the borrower a new form to complete,
along with an explanation indicating the error(s). If an
acceptable form is received, the contractor may be required
to transmit the electronic image of the waiver form in a
separate file to an agency’s central database to be forwarded
in turn to the IRS for approval.
- Upon (and under no other circumstances) receiving notification
of IRS approval of the waiver from an agency’s central database,
the contractor may be required to send a transaction file
to the ordering agency’s central database containing a request
to obtain income tax data from the IRS. The ordering agency’s
central database will obtain the necessary information from
the IRS (Adjusted Gross Income and Filing Status) and transmit
this information to the contractor. The contractor may be
required to use this information, along with information
obtained from the borrower, to calculate the ICR payment
amount, and begin billing the borrower for this amount.
The contractor may be required to obtain, update,
or accept necessary information should there be a problem obtaining
information from the IRS or if the borrower volunteers to provide
alternate documentation.
- The contractor may be required to recalculate the ICR
payment, in accordance with the ordering agency’s guidelines,
at a borrower's request.
- The contractor may be required to provide counseling information
to the borrower regarding repayment options and the effects
of negative amortization. Unless the borrower or the ordering
agency requests a different repayment plan, the contractor
may continue servicing the borrower's account based on the
income contingent repayment amount.
- The contractor may be required to recalculate the borrower's
ICR payment amount in accordance with the ordering agency’s
guidelines, and provide the appropriate disclosure to the
borrower under various circumstances (e.g. change in family
size).
- The contractor may be required to calculate joint repayment
under the ICR plan. Under joint repayment, spouses who both
have loans, and who file their federal income tax return
jointly, may have the payment amounts on their loans calculated
based upon their combined income.
Note: Contractor employees are subject to criminal
prosecution for willful disclosure to third parties of information
secured from Federal tax returns (26 U.S.C. Section 7213(a)).
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