Income-Driven Repayment Changes to Create ‘Student Loan Safety Net’
Inside Higher Ed
January 11, 2023
The Biden administration is moving forward on a sweeping plan to overhaul how student borrowers can repay their loans, though advocates want the Education Department to go further in its plan, while critics cite the price tag as an area of concern.
The Education Department on Tuesday unveiled the details of its planned overhaul of income-driven repayment, which could transform the financing of higher education by providing more generous student loan repayment and forgiveness terms. The proposed regulations will open for 30 days of public comment today. The plan, which was initially announced in August alongside student loan forgiveness, is moving forward despite criticisms and promises of oversight from Republican lawmakers who now control the House of Representatives.
Department officials touted the changes in a media briefing as a new promise to current and future borrowers that would permanently fix a “broken student loan system.” Education Secretary Miguel Cardona said the department would strengthen accountability of postsecondary programs in part by publishing an annual list of programs considered to provide the least financial value in the country. How that list will be built is still up in the air, and the department is seeking public input.
“We’re changing the culture that higher education isn’t affordable in America, especially for Black and brown and other underserved students,” Cardona said. “College graduates earn about a million dollars more throughout their careers [than] those with high school diplomas alone. It’s unfair that only some people in America have that opportunity. For more Americans to realize the benefits of higher education, we must make paying student loans more affordable.”
Cardona’s team at the department has worked steadily over the last few years to forgive millions in student loans and fix several debt-relief programs that didn’t work as intended. The overhaul of income-driven payment is the culmination of those efforts and likely to be the most far-reaching and costly.
“For the first time, we’re creating a student loan safety net in this country,” said James Kvaal, under secretary for education.