Biden's IDR just another grant?

in education •  2 years ago 


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https://www.brookings.edu/opinions/bidens-income-driven-repayment-plan-would-turn-student-loans-into-untargeted-grants/

A much more accurate piece than Matt Bruenig's one on the potential bad incentives in the IDR changes. Still though it engages in hypotheticals and assumptions that aren't really based in reality for the majority of college borrowers. Dependent undergraduates have annual borrowing limits below the cost of attendance. Parents, independent undergraduates, and graduate students are the only borrowers that can borrow beyond those limits up to the cost of attendance. As such gaming opportunities are more constrained than suggested.

Anyways, some good points of discussion. Most importantly some good suggestions for substantive reforms towards the end of the piece. I don't think the incentives are as bad as envisioned given the above, but the IDR changes will substantially increase the subsidy to borrowers.

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