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RELEASE: The Hidden Flaw in Income-Based Repayment Plans Compounds the Student Debt Crisis


August 31, 2016

CONTACT: Kyle Epstein, 202-481-8137

Washington, D.C. — Millions of student-loan borrowers are enrolled in income-driven repayment, or IDR, plans, but few know that the program requires annual recertification. Affecting nearly 60 percent of borrowers, the recertification trap has dire consequences for those who fail to reapply on time. Today, Generation Progress and the Center for American Progress released a column outlining the challenges of annual recertification for IDR and how authorizing multiyear applications would address IDR’s hidden flaw without requiring congressional action.

“Income-driven repayment plans are the best solution available for struggling student borrowers,” said Maggie Thompson, Executive Director of Generation Progress. “But borrowers who do not know about the reapplication trap may find themselves suddenly facing unaffordable monthly payments and a higher loan balance. Fixing this unnecessary paperwork morass would help students keep their debts manageable and allow servicers to dedicate resources to those who need immediate help.”

IDR plans are a lifeline for those currently enrolled, capping monthly loan payments at an affordable rate relative to borrowers’ income. The column argues for allowing borrowers to authorize the Internal Revenue Service to automatically update tax return data so that the U.S. Department of Education can calculate new payment amounts each year. As IDR payments are tied to borrowers’ earnings, this basic information-sharing would eliminate borrowers’ need to submit tedious paperwork, as well as their risk of facing suddenly rising payments.

“We should not let avoidable paperwork stand in the way of repayment success,” said Ben Miller, Senior Director for Postsecondary Education at the Center for American Progress. “Multiyear applications for income-driven repayment are a no-brainer policy that would make student-loan programs work better for everyone involved.”

Read the column here.

For more information or to speak with an expert, contact Kyle Epstein at or 202.481.8137

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