## Notes from 25 June 2025 [[2025-06-24|← Previous note]] ┃ [[2025-06-26|Next note →]] Today I stumbled upon a really interesting [policy brief](https://www.arnoldventures.org/resources/reforming-income-driven-student-loan-repayment-a-safety-net-not-a-subsidy?utm_source=Arnold+Ventures+Newsletter&utm_campaign=04659a8f57-EMAIL_CAMPAIGN_2025_04_09_04_02_COPY_01&utm_medium=email&utm_term=0_-ff3adc73f9-141163409) by [[Arnold Ventures]] about income-driven student loan repayment in the U.S. The main idea is that these plans should act as a safety net for borrowers - not as a blanket subsidy for higher education. Instead of forgiving loans across the board, they argue for a progressive structure where high-income borrowers pay a bigger share, and only the lowest-income ones get relief. The brief is pretty critical of the Biden Administration plans, saying it ends up encouraging over-borrowing and ends up subsidizing even people who go on to earn a lot, while also giving colleges less incentive to keep costs in check. They propose simplifying everything into just two repayment options (fixed or income-based), and pushing for stronger accountability for colleges. One of the key points is the need to protect a minimum income level before repayments kick in—and to make sure people who stay low-income for years aren’t stuck paying forever. This kind of thinking is especially relevant when you zoom out and look at the bigger conversation about how countries fund higher education. The idea that students should help pay for their degrees - since they often benefit a lot in the long run - is behind many cost-sharing models around the world. But the U.S. case is also a warning: relying too much on debt, without safeguards, can backfire and hit vulnerable students hardest. Brazil definitely has a lot to learn here. Our main student loan program, FIES, has been pretty flawed from the start. A national audit by the Federal Court of Accounts pointed out that the government never set clear goals, metrics, or a long-term plan for how the program should work - or even what success looks like. Right now, [6 out of 10 borrowers are in default](https://www.poder360.com.br/poder-educacao/6-em-cada-10-estudantes-com-fies-estao-inadimplentes/). The average debt is around R$46,000 (about $9,000), and the total owed has reached almost R$18 billion (around $3.6 billion) - the highest it's ever been.