Does America's preferred student loan repayment program work? 'That is the big question'

The federal government has consistently hailed income-driven repayment (IDR) as the best way for the tens of millions of American student loan borrowers to pay back federally-held student loans.

But experts are questioning whether that system, which adjusts a graduate’s monthly student loan payments based on their income level, is fundamentally broken.[...]

Furthermore, “we’re like on our ninth iteration of [IDR] at this point,” Mark Huelsman, associate director of policy and research at Demos, said during a recent conference. “This stuff is hard and necessary to untangle… [but] we should actually start over.”

Cancellation would allow the government to clear out bad debt while also providing an opportunity to rethink how we finance higher education, according to Yu.

Huelsman added that broadly canceling student debt, which several prominent Democrats are urging the incoming Biden administration to do through executive action, would be “an admission about what we assumed about this financing instrument is not true.”

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