The Congressional Budget Office (CBO) has published a new report on federal student loan repayment, and the picture isn’t pretty. Six years after first entering repayment on their loans, over half of borrowers owe more than they did when they started repayment. This disappointing fact is partially the result of a program that, ironically, was meant to make student loans more affordable.

Congress created income-driven repayment (IDR) plans in the 1990s, though they only entered widespread use in the early 2010s. Unlike the standard “mortgage-style” fixed repayment plan, in which students pay a set amount every month based on how much they borrowed, IDR plans allow loan payments to vary with income. Most IDR borrowers pay significantly less than they would on the standard plan, and many qualify for a zero-dollar payment.

In one respect, IDR plans have succeeded. The lower monthly payments seem to have enabled most borrowers to avoid defaulting on their debts. While 21 percent of borrowers in plans with a fixed monthly payment had defaulted within six years of starting repayment, the six-year default rate for borrowers in IDR was just six percent.

We should not dismiss the importance of this achievement. Default carries nasty consequences for student borrowers, who can see their wages garnished, their tax refunds seized, and their credit scores take a beating. But the drop in default rates among borrowers in IDR has created a new problem: rising loan balances.

IDR plans cut borrowers’ payments to shockingly low amounts—often to zero. According to CBO’s analysis, borrowers on IDR plans made a “substantive” student loan payment (defined as a payment greater than $10) in just 34 percent of the months that payments were due. As a result, IDR borrowers usually failed to cover their accrued interest every month. Over time, their balances crept upwards.

Now, over three-quarters of borrowers in IDR plans have seen their balances grow over time, compared to fewer than half of borrowers in fixed payment plans. Within six years, a majority of IDR borrowers saw their balances swell by 20 percent or more. By contrast, most borrowers in standard plans paid down at least some of their balances over the same period.

The expansion of IDR plans has led to a Pyrrhic victory against student loan default. While IDR borrowers are unlikely to default on their loans outright, that has come at the cost of rising balances over time.

In theory, this is a better situation. While balances may rise today, borrowers enrolled in IDR are supposed to see their remaining balances forgiven after a set period of time (most commonly 20 years). In practice, however, rising balances are a frequent source of complaints about the loan program, and have fueled demands for loan cancellation. Borrowers who fail to re-enroll in IDR every year are also at higher risk of default—now on even larger balances.

Moreover, taxpayers are on the hook for any balances which borrowers do not repay, which means that the student loan program is now hemorrhaging money. This has raised serious questions about the long-term sustainability of federal student loans.

In 2023, the Biden administration attempted an overhaul of IDR plans. Going forward, IDR plans would forgive borrowers’ unpaid interest on a monthly basis. That overhaul—which would cost taxpayers $455 billion—is currently on hold pending legal challenges. (A federal appeals court ruling states that the overhaul has a “fair chance” of being eventually struck down.)

While the Biden administration’s changes to IDR would prevent rising balances, they would not solve the underlying issue. Borrowers’ monthly payments would remain out of step with the amounts required to repay their loans in full. People in IDR will remain stuck with their debt for decades, and much of the cost burden will shift to taxpayers.

No repayment plan can fully solve those problems. Policymakers instead need to fix the issue at the source, by ensuring that the student loans extended to borrowers are within their expected capacity to repay. That means keeping college costs under control and ensuring that students only borrow to attend high-quality programs. Income-driven repayment might be a remedy for loan defaults. But it is no cure for the problems that created them.