Would Mandatory Income-Driven Repayment Plans For Student Loans Work For Everyone?
Career College Central summary:
Last week, The Institute for College Access and Success (TICAS) released a report regarding the income-driven repayment (IDR) plan for student borrowers, called Should All Student Loan Payments Be Income-Driven? Trade-offs, and Challenges. The report finds that by making the IDR plan mandatory some unintended consequences may prevail.
TICAS was on the forefront of supporting for the IDR plan as a repayment option going so far as developing the policy framework and advocacy campaign. But now with some researchers and policymakers advocating the IDR plan be the only plan or the default plan available for repayment, TICAS is voicing concerns.
Lauren Asher, TICAS President and co-author of the report, points out the validity of the IDR plan in some cases, but the strain it can put on others. “Income-driven repayment is a crucial option for federal student loan borrowers. It can help keep monthly payments manageable and prevent default, but it’s not the best choice for everyone,” Asher said. “If income-driven repayment were mandatory, some borrowers would end up carrying debt for many more years and paying more over the life of their loans. This could make them less likely to buy a home, start a family, save for retirement, or launch a small business.”
The report outlines addition problems of a mandatory IDR plan. Click through to read a list of the plan's positives and negatives.
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