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Groups Release Joint Proposal to Strengthen Income-Based Repayment Program


March 20, 2014

Contact: Colin Seeberger,, 214-223-2913

Higher Education Experts Call for Fix to Student Loan Repayment Program to Address Surging Defaults

Groups Call for Simplifying the Income Based Repayment Process

WASHINGTON, D.C.—Today, a consortium of higher education organizations called on Congress to reform the overly complex repayment process for federal student loans by automatically enrolling all new borrowers in a single repayment plan based on income. Defaults among federal student loan borrowers have nearly doubled over the last five years and federal student loan delinquencies are at an all-time high.

Consortium members HCM Strategists, Institute for Higher Education Policy, National Association of Student Financial Aid Administrators, New America, and Young Invincibles have studied federal student loan repayment challenges in depth over the past nine months.  Their joint white paper Automatic for the Borrower: How Repayment Based on Income Can Reduce Loan Defaults and Manage Risk proposes a series of innovative fixes to streamline the repayment process, including:

  • Reducing defaults by automatically enrolling all new federal student loan borrowers in a single repayment plan based on income;
  • Simplifying the repayment process by collecting payments through an employer withholding system; and
  • Ensuring schools provide value to students by instituting new institutional accountability measures based on students’ ability to repay their debt.

“These proposals would simplify the repayment process and bring borrowers greater financial security,” said Rory O’Sullivan, Policy & Research Director at Young Invincibles. “We know that post-secondary education leads to higher earnings and greater employability, so there’s really no excuse for the defaults and delinquencies that we’re seeing. The system needs to work better.”

“These proposals would help prevent needless defaults and protect borrowers when life throws a financial curveball their way,” says Jason Delisle, Director of the Federal Education Budget Project at New America. “We believe auto-IBR ensures a fair system of repayment, where struggling borrowers are protected but the vast majority repay their loans in full.”

“Far too many students needlessly slip into student loan default despite the numerous safeguards like income-based repayment that would keep their loans current,” said NASFAA President Justin Draeger. “Moving to a system of auto-IBR as proposed in this paper would prevent borrowers who are already facing monumental challenges from the added dire consequences of loan default. We’re encouraged to have been part of the conversation around this idea.”

“With almost three quarters of Americans supporting financial aid reform, it’s time to act,” said Kristin Conklin, founding partner at HCM Strategists. “By creating repayment protections for the neediest students and ensuring accountability for outcomes, these proposals meet a growing need for simplicity, transparency and shared responsibility.”

The recommendations will be announced today at an event hosted by the Committee for Economic Development. This proposal is part of the Reimagining Aid Design and Delivery (RADD) project funded by the Bill & Melinda Gates Foundation. To read the recommendations in full, please visit


The Consortium for Income-Based Student Loan Repayment Reform is a partnership of five organizations concerned with the over $1.2 trillion in student debt and graduates’ ability to repay their loans: HCM Strategists, the Institute for Higher Education Policy, the National Association of Student Financial Aid Administrators, New America, and Young Invincibles.