IDR Plans Face An “Overdue Reckoning.” What’s Next?

Diverse: Issues In Higher Education

Rebecca Kelliher

Apr 29, 2022

About half of the more than $1 trillion in outstanding federal student Direct Loans are being repaid by borrowers through Income-Driven Repayment (IDR) plans, which have been plagued with dysfunction for years.

But last week, the U.S. Department of Education (ED) unveiled IDR fixes to help about 3.6 million borrowers get closer to debt forgiveness. Advocates and industry experts weigh in on what this means.

“We see the department starting to reckon with a lot of the failures of the past, and that kind of reckoning is long overdue,” said Persis Yu, policy director and managing counsel at the Student Borrower Protection Center (SBPC), a student loan borrower advocacy group. “For years, there have been various reports raising red flags, so to have the acknowledgement now that there is a problem and the intent to fix it is huge.”

In the early 1990s, Congress passed the first IDR plans to help the country’s most vulnerable borrowers make more affordable payments on federal student loans. IDR plans adjust monthly payments based on the borrower’s income and family size. Some people can qualify for $0 monthly payments. And after about 20 to 25 years of IDR payments, borrowers can have their outstanding debt forgiven.