PACED: Distillation and On-Policy Self-Distillation at the Frontier of Student Competence

On-policy distillation (OPD) trains a student on its own generated responses using dense, token-level supervision from a stronger teacher. Vanilla OPD treats all teacher signals equally, assuming that the teacher's supervision is equally important for every token. However, teacher signals at different tokens may have very different effects on the student's performance: some correct important reasoning errors, while others have little effect on the final answer. Motivated by this observation, we introduce Dr. OPD (OPD Done Right), which defines the optimal weighted OPD to maximize the student's performance. We formulate Dr. OPD as a bilevel optimization problem in which the student learns from weighted teacher supervision, while the weights are selected to maximize the expected reward of the resulting student. To solve Dr. OPD, we develop an efficient iterative solver that updates the token weights and student policy alternatively. At each round, it updates weights in closed form and then takes one gradient step on the resulting weighted OPD objective. Under regularity conditions, we show that this weighted update achieves a higher expected reward than a vanilla OPD update. Empirically, across strong-to-weak and same-size distillation on math and code, Dr. OPD consistently outperforms all evaluated baselines. In particular, in the strong-to-weak distillation setting, Dr. OPD improves average math performance by $9.7$ points over vanilla OPD, and enables the smaller student to surpass its larger teacher.

On-policy self-distillation (OPSD) uses a privileged teacher to supervise a reasoning model on prefixes sampled from its own rollouts. Yet each rollout also reveals how the student's response unfolds and whether it succeeds, student-specific hindsight that standard OPSD does not use to form the teacher. We introduce Privileged Adaptation from Student Trajectories (PAST), which treats each completed student trajectory as additional privileged information for the OPSD teacher while leaving the student's distillation prefixes unchanged. PAST preserves the student's next-token distribution on correct trajectories and uses failed trajectories to adapt the teacher toward verified success under student-proximity regularization. We characterize what such a trajectory-conditioned teacher can transfer to a prefix-only student. Forward-KL distillation projects the teacher distributions to their conditional arithmetic mean given the prefix. This projection separates trajectory-specific variation that remains privileged from the mean policy shift available to the student. For correct trajectories, the unclipped population objective also has the frozen student as an ideal distributional fixed point. Across three mathematical reasoning benchmarks, PAST improves the Avg@12 macro average over Vanilla OPSD by 5.6 percentage points. A $2\times2$ factorial study shows gains from both complete-trajectory access and teacher adaptation, while trajectory removal and shuffling confirm that the adapted teacher uses the matching hindsight context.

On-policy distillation (OPD) trains a student model by having it generate trajectories, then matching its next-token predictions with an external teacher's next-token predictions. This provides dense, token-level supervision to the student. On-policy self-distillation (OPSD) eliminates the need for the external teacher. Specifically, a second frozen copy of the student model, now given the ground truth in its context, serves as the teacher. The student model only receives the problem and learns to mimic the privileged teacher model, while the teacher remains frozen throughout training. Previous work showed that freezing the teacher is useful for training stability, but we argue that this can prevent the teacher from incorporating the improvements learned by the student during training. Our primary contribution is to address this limitation with a recursive framework built around two complementary components. First, we let the privileged teacher co-evolve with the student so that revision learned in one round can guide the next, a process we refer to as Dynamic Co-Evolution (DCE). Second, because stronger revision can also make responses too verbose and self-critical, we additionally train on shorter, verified rewrites of the model's own on-policy responses. We call this complementary objective Self-Refined Concise Learning (SRCL). Overall, our comprehensive evaluations show that DCE+SRCL outperforms OPSD across multiple model scales and four competition-level mathematics benchmarks. Specifically, on Qwen3-8B, DCE+SRCL reaches 65.97% Average@12, outperforming OPSD by 35.62 percentage points while reducing mean output length by 7.80% relative to DCE alone.