Democratic presidential favorite Joe Biden presented his higher education platform today. There’s a lot in there, but I want to focus on one part: his proposal to make the Income Based Reimbursement (IBR) program for the federal government student loans more generous by reducing payments to just 5% of discretionary income.

Income-based repayment allows student borrowers to tie their payments to income, to ensure payments are always affordable – a nice idea in principle. In the current most generous version of the IBR, borrowers contribute 10% of the income they earn above a certain threshold (about $ 25,000 for a two-person household) to their student loans. If a balance remains after 20 years of payment, this amount is canceled by the taxpayers.

Biden would cut student loan IBR payments of 10% to 5% of discretionary income. It sounds like a trivial change, but it could end up being the most expensive board of its entire higher education platform.

Take the example of a borrower in debt of $ 50,000 who earns a starting salary of $ 50,000. In the current version of the IBR, this borrower would repay his debt in full before reaching the 20-year forgiveness mark. But as part of Biden’s plan, she would receive more than $ 40,000 in loan forgiveness, courtesy of taxpayers.

Or imagine a student borrowing $ 100,000 – the typical amount these days for professional degrees – which earns a starting salary of $ 75,000. This borrower has a partial loan forgiveness worth about $ 40,000 under the current system. But according to Biden’s plan, his payments would be so low relative to his balance that he would never even breach his capital. Taxpayers would give this borrower nearly $ 130,000 in rebate, more than what he had originally borrowed with accrued interest.

The IBR provides an important safety net for low-income borrowers. But in practice, the biggest beneficiaries of the program are borrowers with graduate degrees, who tend to have larger balances and thus benefit more from the loan forgiveness on offer. These borrowers are also richer. Only 3% of IBR loans are associate with borrowers earning less than $ 40,000. Borrowers who earn more than $ 80,000 account for three-fifths of outstanding loans in the IBR.

Biden’s IBR expansion is therefore poised to deliver government benefits to those who need them least. It is possible that Biden’s IBR expansion was even more regressive than an explicit and initial student debt cancellation, at the same time. Elizabeth warren or Bernie Sanders. While Biden has positioned himself as a moderate in the Democratic primary, he still offers a massive student loan forgiveness like his left-wing rivals; he just calls it by another name.

Currently, many borrowers who do not need IBR benefits are still using these plans at taxpayer expense. Meanwhile, many low-income borrowers who genuinely need a reduction in their payments are unaware that IBR is an option. According to the National Center for Education Statistics, only 45% of undergraduate borrowers are aware of IBR plans.

Rather than spending more money on loan cancellation for wealthy graduate students, Biden and other Democrats should focus on reducing this information gap first. It is a vision that the moderate wing of the Democratic Party should support. Instead, Biden offered another loan forgiveness plan, albeit via a convoluted backdoor.