Borrowers using the federal government’s income-driven repayment plans are overwhelmingly low-income and much less likely to default, according to a new report from the Government Accountability Office. The report, which was requested by Sen. Patty Murray of Washington, the top Democrat on the Senate’s education committee, also encourages the Education Department to better spread the word about the programs.
The Obama administration began such an effort last year, and reported last month that the number of students enrolled in income-based repayment had jumped by more than 50 percent in one year.
According to the report, the vast majority of borrowers enrolled in income-driven repayment plans earned less than $20,000 per year. And of borrowers who entered such plans from 2010 to 2014, less than 1 percent had defaulted. That’s compared to 14 percent of borrowers using the standard repayment method.
Read more at The Chronicle of Higher Education: http://chronicle.com/blogs/ticker/borrowers-using-income-based-repayment-plans-are-mostly-low-income-report-says/104677