Thread by @Dcollier74

🧵on #IDR recently, I talked with the #CBO as a SME to help their modeling, with the limited information they had.

I refused to guess what % of people in the portfolio would go into the "new IDR" as details were lacking. I smart not to as REPAYE will be the vessel of changes.

https://twitter.com/AdamSMinsky/status/1612797708330229762

I think this plan will encourage more people with UG debt to enroll in REPAYE and see what happens - sorta like insurance against economic shocks, as I said to @AnnaHelhoski in the piece she modeled outcomes for last year.

The ≤$12k marker for UG debt to be forgiven at 10 years seems arbitrary - as $17K is the average loan debt for those with an Associates and $14k with a certificate.

This should help stop-outs, though - but $20k just makes more sense without the complexity of +$1k = 1 more year.

However, I am concerned these arbitrary cutoffs will keep First Gen and non-White borrowers in repayment longer than counterparts because they simply tend to have more debt, on average.

Like, who are you actively trying to help here?

bankrate.com/loans/student-…

The to discretionary income is going to be a welcomed change that helps borrowers - but SIMPLICTY should have been better valued here.

This is really going to be an administrative cluster and people are going to have a REAL hard time figuring out what they should be paying...

Because people are going to have an even harder time figuring out what they should be paying, keeping entities like MOHELA or our own Government accountable is also going to be difficult - if not impossible.

^This should be VERY concerning. We're already bad at this.

The administrative changes to how much individuals will pay are likely to most benefit women borrowers (who are more likely then men to be in IDR) - and likely non-White borrowers.

Additionally, benefited are likely to be the legit middle-earners and those slightly above such...

I am not seeing much here that will actively encourage those within the lowest earning bins to enroll in IDR at higher rates - not without some help and outreach from institutions and #FSA (who we're effectively defunding with a flat budget, btw).

ir.library.louisville.edu/jsfa/vol50/iss…

I've never cared about the joint filing loophole - an individuals' federal repayment should not be dependent on joint income.

I know some people will re-label this as "savvy" but I don't buy into that narrative - when we got literal billionaires paying zero effect taxes.

Next, the changes to interest are the most important. I believe, this will help ease their mental and psychological distress levels.

From the borrowers I've talked with - the stress of seeing that balance go up without any sense of getting out from it is EXTREMELY taxing...

Increased psych distress is related to suicidal thoughts and other non-cog factors. Non-cog attributes are worth $ to the places they work for and to our government - affect behaviors like productivity. Should be part of economic models moving forward.

protectborrowers.org/new-analysis-i…

Finally, not including Parent PLUS loans was a mistake - period.

I do not do work in Parent PLUS - @bakerdphd does so she's the go to there. But, their dis-inclusion was an absolute failure.

Also, @AdamSMinsky good write up there in the OG Tweet.

To add on here with my point about FSA - @NPRCoryTurner just dropped something recently that addresses exactly that issue

npr.org/2023/01/10/114…

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