Testimony: Eliminating IDR Plans Will Increase Default, Not Repayment

Testimony: Eliminating IDR Plans Will Increase Default, Not Repayment

Carolina Rodriguez

Testimony delievered at U.S. Department of Education public hearing on "Negotiated Rulemaking for Higher Education 2025-2026"

Thank you for the opportunity to provide testimony today.

My name is Carolina Rodriguez, and I serve as the Director of the Education Debt Consumer Assistance Program, or EDCAP, at the Community Service Society of New York. We are proud to be the first program of our kind in the nation-offering free, unbiased, one-on-one assistance to student loan borrowers across New York State who are navigating repayment, default, forgiveness, and everything in between. We've directly assisted thousands of borrowers, giving us a deep understanding of how federal student loan policies impact real people's lives.

Let me be clear: proposals to eliminate income-driven repayment (IDR) plans like SAVE, PAYE, and ICR-or to restrict the types of employers eligible under Public Service Loan Forgiveness (PSLF) program-would cause significant harm and push struggling borrowers further into financial distress.

We recently conducted national research to better understand borrower repayment challenges. What we found was stark:

• The high cost of everyday living (73%) and immediate expenses (64%) are the top barriers to repaying student loans-not a lack of willingness or responsibility.
• Many borrowers are juggling multiple types of debt-payday loans, credit cards, and back rent-and report that these carry more immediate stress and consequences than student loans.

In New York City, our Unheard Third survey adds an even deeper layer:

• Nearly half of households with student loan debt reported experiencing housing hardship, and 40% reported food insecurity.
• Among low-income borrowers, 60% experience three or more economic hardships, from health issues to childcare barriers to reduced wages. And this is not just a low-income issue. Even moderate- and high-income households with student loan debt report multiple financial strains.

These findings are a clear warning: eliminating IDR plans will not increase repayment, it will increase default. For many borrowers, including Parent Plus loan borrowers who consistently are left struggling, affordable repayment plans are the only viable path to staying in good standing while covering basic needs.

PSLF is equally critical. It has taken over 17 years to make the program work as intended. Restricting access to PSLF would have far-reaching consequences-not just for borrowers, but for the public. Critical fields like health care and education are already facing severe workforce shortages. Making loan forgiveness harder to access would only deepen these challenges. No American wants to be told they have to wait weeks or months to see a doctor, or that their child is sitting in an overcrowded classroom because we made it harder for public servants to afford staying in their jobs.

In closing, I urge the Department to protect and strengthen-not dismantle-IDR and PSLF. These are lifelines and not loopholes. And I will say it again-eliminating IDR plans will not increase repayment, it will increase default.

Thank you.

Issues Covered

Economic Mobility & Security

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