This isn't new, and it still causes the graduate's debt to increase very quickly so the risk is very real. If the gov paid the interest that would cause both moral hazard and reduce real risk on the graduate.

Agreed, this is just a re-branding for the appearance of helping innovation. Now, if they were taking on student's private debt and letting them do IBR, that would be a program; however, the logistics and risk would be absurd.

something to know:

Generally, if you are responsible for making loan payments, and the loan is canceled (forgiven), you must include the amount that was forgiven in your gross income for tax purposes. However, if you fulfill certain requirements, two types of student loan assistance may be tax free. The types of assistance discussed in this chapter are:

Student loan cancellation, and

Student loan repayment assistance.

Student Loan Cancellation

If your student loan is canceled, you may not have to include any amount in income. This section describes the requirements for tax-free treatment of canceled student loans.

Qualifying Loans

To qualify for tax-free treatment, for the cancellation of your loan, your loan must have been made by a qualified lender to assist you in attending an eligible educational institution and contain a provision that all or part of the debt will be canceled if you work:

For a certain period of time,

In certain professions, and

For any of a broad class of employers.

see: http://www.irs.gov/publications/p970/ch05.html

This is just the IBR plan, right? The one which has already existed for years?

Wow! This seems like is could be a really good initiative. Are there any success stories form this program yet?

It's not a new thing. It's just a different marketing strategy for income based repayment.

Did they really need to provide "fictitious examples?"