Ethan Pollack
@ethanpollack.bsky.social
Higher ed finance, workforce development, labor markets, and econ policy. Senior Director at Jobs for the Future. Alum of Aspen, Pew, EPI, and OMB. Views mine.
One interesting feature of this proposal is the concept of cliffs.
In some sense, it's anti-cliff: no threshold, no rising balance => forgiveness.
But using graduated rates to calculate payments could create a new cliff effect, especially b/c rates are assessed on total rather than marginal AGI.
In some sense, it's anti-cliff: no threshold, no rising balance => forgiveness.
But using graduated rates to calculate payments could create a new cliff effect, especially b/c rates are assessed on total rather than marginal AGI.
April 28, 2025 at 7:34 PM
One interesting feature of this proposal is the concept of cliffs.
In some sense, it's anti-cliff: no threshold, no rising balance => forgiveness.
But using graduated rates to calculate payments could create a new cliff effect, especially b/c rates are assessed on total rather than marginal AGI.
In some sense, it's anti-cliff: no threshold, no rising balance => forgiveness.
But using graduated rates to calculate payments could create a new cliff effect, especially b/c rates are assessed on total rather than marginal AGI.
From the borrower perspective:
Pro: Balances are guaranteed to fall over time, as long as borrower pays at least $10/month
Con: Monthly payments are likely to be be higher
Pro: Balances are guaranteed to fall over time, as long as borrower pays at least $10/month
Con: Monthly payments are likely to be be higher
April 28, 2025 at 7:34 PM
From the borrower perspective:
Pro: Balances are guaranteed to fall over time, as long as borrower pays at least $10/month
Con: Monthly payments are likely to be be higher
Pro: Balances are guaranteed to fall over time, as long as borrower pays at least $10/month
Con: Monthly payments are likely to be be higher
Eliminating the threshold has big impacts:
1. Low-income borrowers (i.e. those who would otherwise fall under the earnings thresholds) would have to make monthly payments.
2. Monthly payments are calculated as % of AGI rather than % of discretionary income (i.e. income above threshold).
1. Low-income borrowers (i.e. those who would otherwise fall under the earnings thresholds) would have to make monthly payments.
2. Monthly payments are calculated as % of AGI rather than % of discretionary income (i.e. income above threshold).
April 28, 2025 at 7:34 PM
Eliminating the threshold has big impacts:
1. Low-income borrowers (i.e. those who would otherwise fall under the earnings thresholds) would have to make monthly payments.
2. Monthly payments are calculated as % of AGI rather than % of discretionary income (i.e. income above threshold).
1. Low-income borrowers (i.e. those who would otherwise fall under the earnings thresholds) would have to make monthly payments.
2. Monthly payments are calculated as % of AGI rather than % of discretionary income (i.e. income above threshold).
This "Pay For Success" model isn't a panacea: some programs may not be a good fit, and there are transactions costs relating to developing/running the model, which requires a contractual partnership across multiple organizations.
But these challenges can be overcome as the model matures.
But these challenges can be overcome as the model matures.
February 7, 2025 at 3:28 PM
This "Pay For Success" model isn't a panacea: some programs may not be a good fit, and there are transactions costs relating to developing/running the model, which requires a contractual partnership across multiple organizations.
But these challenges can be overcome as the model matures.
But these challenges can be overcome as the model matures.