Balancing Risk and Responsibility: Reforming Student Loan Repayment

Income-based repayment plans are supposed to make student loan repayment more manageable for low-income borrowers. But critics say the programs offer a windfall to high-income, high-debt professionals, and encourage graduate schools to raise tuition. This paper by the American Enterprise Institute suggests steps to reduce this “moral hazard” and target the programs’ benefits to the neediest students.