Debt cancellation got all the attention, but this Biden proposal could impact student-loan borrowers more, critics and advocates say

When President Joe Biden announced in August that his administration planned to cancel $10,000 in federal student debt for most borrowers, Allison Daurio felt some relief. 

Under the White House’s debt forgiveness plan, Daurio , 29 would see about one-quarter of her student loan balance wiped away. But as she read more closely through the proposal, Daurio realized that another detail would likely have a bigger impact on her life: the Biden administration’s plan to make sweeping changes to the way borrowers repay their student loans. 

“I felt that was a bigger story,” Daurio said of the proposed reforms.

Student-loan policy experts — both supporters and detractors of the Biden administration’s debt relief initiative — also believe that the White House’s proposed new income-driven repayment plan, known as IDR, could reshape the student loan system. Officials haven’t released the details of their proposed changes to the government program that allows student-loan borrowers to pay back their debt as a percentage of their income. But if the pieces of the plan officials have already outlined come to fruition, it could radically change the experience of repaying student loans for millions of borrowers.

“It will go a long way towards solving one of the big problems, which is that if people are doing what the Department [of Education] is asking them to do and making payments every month, not seeing their balances grow over time is really, really important,” Sarah Sattelmeyer, project director, Education Opportunity and Mobility at New America, a think tank, said of the proposed reforms. 

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