In a whitepaper, the SBPC, the National Consumer Law Center, and the Center for Responsible Lending offer a proposal to the Biden administration to fix income-driven repayment via the creation of an “IDR waiver.” This waiver would cut through the red tape that has long stymied the IDR program and deliver a pathway out of student debt by giving borrowers credit for time in repayment. These sweeping changes would complement the recent actions to fix the Public Service Loan Forgiveness program and ensure that low-income and borrowers of color—who have historically struggled to access IDR—can finally realize the promise of IDR cancellation.
While student loan cancellation under IDR has been possible since 2016, just 32 borrowers have ever successfully had their loans cancelled. At the same time, over 4.4 millions borrowers have been in repayment 20 years or longer and theoretically should be able to access forgiveness via IDR. This waiver is necessary for restoring borrower trust in IDR