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It details how borrower characteristics are analyzed and how the agency projects earnings, repayment behavior, and resulting forgiveness. Findings indicate these plans are heavily used by borrowers with large balances and low earnings. The typical borrower shows negative amortization, while substantial forgiveness is projected for low-income borrowers, explaining declines in repayment rates between 2008 and 2017.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/income-driven-repayment-plans-for-student-loans-working-paper-2020-02/583665/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/income-driven-repayment-plans-for-student-loans-working-paper-2020-02/583665.png","ImageObject",300,407,{"name":92,"@type":93},"Jacob","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-29","2026-10-15",true,{"@type":102,"interactionType":103,"userInteractionCount":34},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What is the purpose of this working paper?","Question",{"text":112,"@type":113},"The paper provides additional information on the analysis underlying CBO’s budgetary estimates for income-driven repayment plans, including borrower characteristics and the technical empirical model used for forecasting earnings, repayment, and forgiveness.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How do income-driven repayment plans affect borrower repayment outcomes?",{"text":117,"@type":113},"The results indicate that these plans are heavily used by borrowers with large balances and low earnings. The typical borrower is negatively amortizing, and substantial forgiveness is projected for low-income borrowers.",{"name":119,"@type":110,"acceptedAnswer":120},"What helps explain the decline in student loan repayment rates between 2008 and 2017?",{"text":121,"@type":113},"The paper concludes that increased take-up of income-driven repayment and the negative amortization patterns in those plans explain much of the decline in repayment rates during that period.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},583665,1792190790,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":34,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},962084931830,"https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd","Working Paper Series  \nCongressional Budget Office  \nWashington, D.C.  \nIncome-Driven Repayment Plans for Student Loans  \nNadia Karamcheva  \nCongressional Budget Office  \n[nadia.karamcheva@cbo.gov](nadia.karamcheva@cbo.gov)  \nJeffrey Perry  \nCongressional Budget Office  \n[jeffrey.perry@cbo.gov](jeffrey.perry@cbo.gov)  \nConstantine Yannelis  \nVisiting scholar at the Congressional Budget Office from the University of Chicago Booth School of Business  \n[constantine.yannelis@chicagobooth.edu](constantine.yannelis@chicagobooth.edu)  \nWorking Paper 2020-02  \nApril 2020  \nTo enhance the transparency of the work of the Congressional Budget Office and to encourage external review of that work, CBO’s working paper series includes papers that provide technical descriptions of official CBO analyses as well as papers that represent independent research by CBO analysts. Papers in this series are available at [http://go.usa.gov/xUzd7](http://go.usa.gov/xUzd7) .  \nThe authors wish to thank Matthew Chingos, Sheila Dacey, Molly Dahl, Michael Falkenheim, Sebastien Gay, Justin Humphrey, Jeffrey Kling, Holger Mueller, and Julie Topoleski for helpful discussions and comments. Any views or interpretations expressed in this paper are those of the authors and do not necessarily reflect the views ofCBO or any other organization. Tia Caldwell and Delaney Smith provided outstanding research assistance. Christine Browne edited the paper. This technical paper complements CBO’s report IncomeDriven Repayment Plans for Student Loans: Budgetary Costs and Policy Options.  \nAbstract  \nIn February 2020, the Congressional Budget Office released a report on the budgetary effects of student loans repaid through income-driven plans. This paper provides additional information on the analysis the agency conducted on the characteristics of borrowers in those plans and the methods the agency used to project borrowers’ earnings, repayment, and resulting forgiveness. The results show that income-driven repayment plans are heavily used by borrowers with large balances and low earnings. The typical borrower in income-driven repayment is negatively amortizing, and substantial forgiveness is projected for low-income borrowers in such plans. Overall, increased take-up of income-driven repayment and the negative amortization in those plans explain much of the decline in student loan repayment rates between 2008 and 2017.  \nKeywords: student loans, income-driven repayment, student loan forgiveness  \nJEL Classification: D14, G18, H52, H8, J24  \nContents  \nI. Introduction ............................................................................................................................. 1  \nII. Income-Driven Repayment ..................................................................................................... 5  \nIII. Data ...................................................................................................................................... 7  \nIV. Borrowers’ Selection Into Income-Driven Plans ................................................................. 8  \nRecent Trends in Enrollment and Repayment in Income-Driven Plans ..................................... 8  \nSelection of Borrowers Into Income-Driven Repayment ........................................................... 9  \nV. Negative Amortization and Declining Repayment Rates ..................................................... 12  \nVI. Loan Repayment and Forgiveness ..................................................................................... 14  \nVII. Concluding Remarks.......................................................................................................... 17  \nReferences ..................................................................................................................................... 19  \nAppendix A: Microsimulation Model........................................................................................... 36  \nModeling Borrowers’ Demogr","cbCaiiw6ZGSppjHQ","https://ap.wps.com/l/cbCaiiw6ZGSppjHQ","pdf",1236447,59,"English","# I. Introduction\n# II. Income-Driven Repayment\n# III. Data\n# IV. Borrowers’ Selection Into Income-Driven Plans\n## Recent Trends in Enrollment and Repayment in Income-Driven Plans\n## Selection of Borrowers Into Income-Driven Repayment\n# V. Negative Amortization and Declining Repayment Rates\n# VI. Loan Repayment and Forgiveness\n# VII. Concluding Remarks\n# Appendix A: Microsimulation Model\n# Appendix B: Additional Results\n# References","[{\"question\":\"What is the purpose of this working paper?\",\"answer\":\"The paper provides additional information on the analysis underlying CBO’s budgetary estimates for income-driven repayment plans, including borrower characteristics and the technical empirical model used for forecasting earnings, repayment, and forgiveness.\"},{\"question\":\"How do income-driven repayment plans affect borrower repayment outcomes?\",\"answer\":\"The results indicate that these plans are heavily used by borrowers with large balances and low earnings. The typical borrower is negatively amortizing, and substantial forgiveness is projected for low-income borrowers.\"},{\"question\":\"What helps explain the decline in student loan repayment rates between 2008 and 2017?\",\"answer\":\"The paper concludes that increased take-up of income-driven repayment and the negative amortization patterns in those plans explain much of the decline in repayment rates during that period.\"}]","Income-Driven Repayment Plans for Student Loans - Working Paper 2020-02 | PDF",1792048014,149]