Most of the public debate over President Biden’s proposal to reduce student loan debt has focused on his plan to forgive up to $20,000 per borrower, which is currently in front of the US Supreme Court. However, a less publicized proposal could do even more to help borrowers and would be less likely to invite legal challenges if it was revised to focus on the borrowers most in need of help.

The Biden administration’s proposed regulation would create a new income-based repayment plan that’s much more generous than existing plans. It would reduce monthly payments by more than half, including by reducing the share of discretionary income paid on undergraduate loans from 10 percent to 5 percent, and it would make it easier for borrowers to work toward loan forgiveness. Under the new plan, borrowers would pay so little toward their loans that few would have to fully repay them before they were forgiven, transforming student loans into a delayed grant program for most borrowers.

The regulation would also make several improvements to the student loan system to protect borrowers at the highest risk of defaulting on their loans. The most significant is a provision to automatically enroll delinquent borrowers in income-based repayment, which evidence shows could prevent more than half of early defaults even without changing the terms of repayment. The proposal would also reduce the number of available repayment plans, making the system easier for borrowers to navigate.

The Congressional Budget Office has estimated that the Biden administration’s repayment proposal will cost about $250 billion over the next 10 years. Conservative groups are already arguing (PDF) that such a costly administrative action violates federal law, and if they successfully challenge the proposal, the US Department of Education will have to restart the lengthy regulatory process that’s been underway since 2021. That would leave borrowers stuck with the current repayment system through at least 2025, putting their fates in the hands of whoever wins the 2024 election.

The Biden administration can still alter its repayment proposal to shield it from legal challenges by making it less costly. The most expensive elements of the proposal are increasing the amount of income excluded from the payment calculation and reducing the share of discretionary income paid. If the plan were adjusted to make these elements less generous for higher-income borrowers, by increasing the share of income paid for borrowers with higher incomes (similar to how the progressive income tax works), it could significantly decrease the cost while still supporting the lower-income borrowers at higher risk of default (PDF).

A proposal that’s on more solid legal footing could support the restart of loan payments after a pause of more than three years, which is expected to be challenging at best and a disaster at worst. If the new income-based plan ends up put on hold by litigation, the administration will have fewer tools to support borrowers as they resume payments. Focusing the income-based proposal on the borrowers at greatest risk of delinquency and default could increase the chance that it delivers relief to those who need it most.