On-Policy Distillation (OPD) has gained wide attraction as an LLM post-training paradigm due to its effectiveness in improving capabilities without introducing model distribution drift, and consequently, regression in general tasks. On-Policy Self-Distillation (OPSD) is an efficient use-case of OPD, which is appealing as it requires only a single model as a student and teacher, and it also has the benefit of providing privileged context that is a absent at inference time (e.g. a persona, a private fact, or a worked solution) to the teacher during the training process. The challenge in this approach is that the privileged information can change model behavior more than intended: it can modify reasoning, degrade general capabilities, and affect performance indicators like response length, style, or local token preferences. Consequently, OPSD may train the student on side effects rather than a desired, transferable behavior. In this paper, we study this problem in a rare-token/identity setting and propose EviDence GuidEd On-Policy Distillation (EDGE-OPD), a modification of OPSD with two distinct characteristics: a) it uses guided rollouts to inject privileged-context behavior to the student at sampling time, so that the rare target behavior is actually present in the on-policy data, and b) it applies an evidence mask: the student is updated only at token positions where the privileged context supports the sampled token, rather than on every token in the rollout. We empirically show that OPSD (and its variant RLSD, with and without a verifier) completely fail to learn a target identity, while the integration of guided rollouts allows them to succeed. Additionally, mask-region ablations show that the persona signal is localized to the positive-evidence tail, allows us to draw valuable insights about efficient knowledge transfer and preservation of general purpose capabilities.
On-policy distillation (OPD) offers superior capacity transfer by supervising student-sampled trajectories with dense token-level signals. To furnish high-quality supervision sources and thereby elevate the performance frontier of distillation, an intuitive direction is to infuse privileged information to either teacher or student itself. However, this additional input induces a potential failure mode we dub privilege illusion: a pattern that conflates the transferable capability gap that students are meant to close, and the information asymmetry gap that can only be mimicked but never replicated. This issue is further amplified by the inherent non-uniformity of token-level supervision, where only a small subset of tokens carries pivotal capability-bearing signals. To this end, we propose DOPD, an advantage-aware dual distillation paradigm that dynamically routes token-level supervision between privileged teacher and privileged student policies based on their advantage gap and relative probabilities. Each token receives supervision of different strength, objective, and strategy from either teacher or student itself, which transfers credible capability while simultaneously receiving auxiliary signals, to alleviate privilege illusion. Extensive experiments on both large language model (LLM) and vision-language model (VLM) settings demonstrate that DOPD consistently outperforms Vanilla OPD and other counterparts. Further results on stability, robustness, continual learning, and out-of-distribution tasks validate its superiority.
On-policy distillation (OPD) has become a key paradigm in LLM post-training, yet its training dynamics remain poorly understood. We present a systematic study examining the role, pathologies, and regulations of OPD. We first clarify the role of OPD as an exploration catalyst: it steers the student toward correct reasoning paths via dense token-level guidance, without expanding capability ceiling. We confirm this by showing that prompt diversity matters more than per-problem sampling numbers, and critically, that the effectiveness of OPD hinges entirely on the quality of its guiding signal. This dependency exposes two pathologies that derail exploration. The Student-Teacher Mismatch occurs when a large teacher-student distributional gap causes the guiding signal to misalign with task correctness, steering exploration in counterproductive directions. Length Exploitation arises when the aggregated token-level objective creates length-dependent shortcuts, allowing the student to game the reward landscape through response truncation or redundant padding, exploring degenerate length modes rather than reasoning strategies. To tame these pathologies, we investigate lightweight signal regulations: advantage clipping and log-scale compression, ensuring exploration is guided by faithful signals. Experiments across seven benchmarks demonstrate that these regulations alleviate length exploitation and enable effective distillation, stably surpassing OPD variants and RLVR baselines, thereby confirming that well-regulated signal quality, rather than mere teacher scale, governs successful exploration in OPD.
On-policy distillation (OPD) and on-policy self-distillation (OPSD) have emerged as promising post-training methods for large language models, offering dense token-level supervision on trajectories sampled from the model's own policy. However, existing results on their effectiveness remain mixed: while OP(S)D has shown promise in system prompt and knowledge internalization, recent studies also report instability and degradation. In this work, we present a comprehensive empirical study of when OPD and OPSD work, when they fail, and why. We find that OPD on mathematical reasoning is highly sensitive to teacher choice and loss formulation, whereas OPSD fails in our tested settings due to test-time absence of instance-specific privileged information (PI). In contrast, OPSD is effective when PI represents a shared latent rule, such as a system prompt or alignment preference. We identify three failure mechanisms: (1) distribution mismatch between teacher and student caused by conditioning on student-generated prefixes, (2) optimization instability from biased TopK reverse-KL gradients, and (3) an OPSD-specific limitation where the student learns a PI-free policy that aggregates PI-conditioned teachers, which is insufficient when PI is instance-specific. We further show that stop-gradient TopK objectives, RLVR-adapted teachers, and SFT-stabilized students mitigate these failures.