Yet income-driven repayment, or IDR, plans aren’t without problems. Negotiators this week pointed out how IDR plans can fail to account for varied costs of living across the country. Plus, borrowers enrolled in IDR plans are often still vulnerable to debt scams and report feeling distressed about the debt they have. Several negotiators urged the department not to prevent people eligible for IDR plans from being excluded from other forms of debt forgiveness. And some repeatedly highlighted the exemption of parent PLUS loans from most IDR options.
Negotiators on Tuesday also urged the department to not base IDR plans on federal poverty guidelines, which were described as “woefully inadequate.” A family of four in 2023, for example, would have to make as little as $30,000 a year to meet the criteria.
“If you are at the poverty level, you are in destitution,” said John Whitelaw, a negotiator representing borrowers with disabilities.
