Income-Driven Repayment Plans for Student Loans. Working Paper 2020-02
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| Title: | Income-Driven Repayment Plans for Student Loans. Working Paper 2020-02 |
|---|---|
| Language: | English |
| Authors: | Karamcheva, Nadia, Perry, Jeffrey, Yannelis, Constantine, Congressional Budget Office |
| Source: | Congressional Budget Office. 2020. |
| Availability: | Congressional Budget Office. Ford House Office Building 4th Floor, Second and D Streets SW, Washington, DC 20515-6925. Tel: 202-226-2809; e-mail: publications@cbo.gov; Web site: http://www.cbo.gov |
| Peer Reviewed: | N |
| Page Count: | 59 |
| Publication Date: | 2020 |
| Document Type: | Reports - Evaluative |
| Education Level: | Higher Education Postsecondary Education |
| Descriptors: | Income, Loan Repayment, Student Loan Programs, Federal Aid, Budgets, Enrollment, Costs, Taxes, Loan Default, Debt (Financial), Undergraduate Students, Graduate Students, Federal Legislation, Student Characteristics |
| Laws, Policies and Program Identifiers: | Family Education Loan Program, Stafford Student Loan Program, Federal Direct PLUS Loan Program |
| Abstract: | In February 2020, the Congressional Budget Office released a report on the budgetary effects of student loans repaid through income-driven plans. This paper provides additional information on the analysis the agency conducted on the characteristics of borrowers in those plans and the methods the agency used to project borrowers' earnings, repayment, and resulting forgiveness. The results show that income-driven repayment plans are heavily used by borrowers with large balances and low earnings. The typical borrower in income-driven repayment is negatively amortizing, and substantial forgiveness is projected for low-income borrowers in such plans. Overall, increased take-up of income-driven repayment and the negative amortization in those plans explain much of the decline in student loan repayment rates between 2008 and 2017. [This technical paper complements the report "Income Driven Repayment Plans for Student Loans: Budgetary Costs and Policy Options" (ED607182).] |
| Abstractor: | As Provided |
| Entry Date: | 2021 |
| Accession Number: | ED614197 |
| Database: | ERIC |
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