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New Study on Income-Driven Repayment Plans

April 10, 2018

Enrollment in income-driven repayment plans for student loans can change significantly depending on the particular benefit emphasized to borrowers, according to a National Bureau of Economic Research paper released Monday.

Using data from a survey of University of Maryland undergraduates, researchers found that student loan borrowers were more likely to enroll in IDR plans when they were presented as insurance against unaffordable payments, rather than a cost-saving measure. The plans allow borrowers to set their loan payments based on a percentage of their income instead of a standard fixed monthly payment.

The Obama administration sought to boost enrollment in IDR plans -- and lower loan default rates -- with more outreach to borrowers, including targeted communications. But as of the fourth quarter of 2017, only 28 percent of the 23 million borrowers who had entered repayment on their student loans were enrolled in an income-based plan.

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Andrew Kreighbaum

Andrew Kreighbaum joins Inside Higher Ed as our federal policy reporter. Andrew comes to us from The Investigative Reporting Workshop. He received his master's in data journalism at the University of Missouri, and has interned at USA Today and a national journalism institute in Columbia, MO. Before getting his master's, Andrew spent three years covering government and education at local papers in El Paso, McAllen and Laredo, Texas. He graduated in 2010 from the University of Texas at Austin, where he majored in history and was news editor at The Daily Texan.

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