GR-OPD: Group-Relative Sequence Credit for On-Policy Distillation

On-policy distillation (OPD) has emerged as an effective approach for large language model post-training, yet existing objectives face a trade-off between objective fidelity and optimization stability. Token-level OPD provides stable but local supervision, whereas sequence-level OPD captures future credit at the cost of horizon-dependent variance. We establish a unified temporal-credit view of these formulations, showing that practical token-level OPD can be interpreted as a temporal approximation to the sequence-level reverse-KL gradient. Building on this connection, we propose $γ$OPD (GammaOPD), which uses discounted temporal credit assignment to balance long-horizon supervision and optimization stability, while admitting a horizon-independent variance bound. We further develop a reward-compatible bounded mixing (RBM) mechanism for $γ$OPD that balances verifiable outcome feedback with the discounted OPD advantage to move beyond purely teacher-dependent optimization. Experiments on mathematical and code reasoning demonstrate consistent improvements over existing OPD methods across vanilla, size-mismatched, and multi-teacher distillation settings.

On-policy distillation (OPD) learns from teacher feedback on student-generated responses and has shown promise in reducing forgetting relative to supervised fine-tuning (SFT). However, its benefits and fragility remain incompletely understood. We study sequential distillation from multiple teachers, where the student minimizes its average divergence from the teachers. Forward Kullback--Leibler (KL) divergence yields a weighted arithmetic mixture, while reverse KL yields a normalized weighted geometric aggregate. We develop algorithms that learn these targets under off-policy and on-policy feedback, respectively, establishing logarithmic regret bounds in the tabular setting and extending the analysis to function approximation. By analyzing these aggregation targets, we identify mechanisms that help explain both the benefits and fragility of OPD. Relative to forward KL, reverse KL can better retain a confident expert's preferences under uninformative feedback, but is more sensitive to teachers that assign very low probabilities to correct responses. Its token-level conditionals also reveal a dependence on continuation distributions that can favor incorrect prefixes over long horizons.

On-policy distillation (OPD) trains a student on its own responses using dense token-level guidance from a stronger teacher. In long-context tasks, however, token-level teacher support can favor locally plausible responses that omit evidence distributed across the input or violate global task constraints. Task-specific verifiers, in contrast, evaluate task completion at the response level and may return graded rewards that reflect partial success. We diagnose this mismatch on fixed responses from two representative long-context evidence-aggregation tasks. Across longer input ranges, trajectory-level OPD scores become progressively less aligned with verifier rewards, indicating teacher-verifier disagreement. Motivated by this observation, we introduce Group-Calibrated On-Policy Distillation (GC-OPD). GC-OPD separately normalizes verifier rewards and trajectory-level OPD scores within each rollout group and uses their difference as a signed teacher-verifier disagreement residual. Relative-advantage-based credit assignment (RACA) distributes this trajectory-level residual across tokens according to their relative OPD advantages while preserving the original OPD signal. Across five long-context benchmarks, post-training with GC-OPD raises the five-benchmark averages of the official Qwen3-4B and Qwen3-8B checkpoints from 29.08 to 40.47 and from 35.12 to 44.65, respectively. Vanilla OPD reaches 39.31 and 43.56 under the same setup. Controlled ablations show that the signed residual is more effective than either an additional OPD-derived term or direct group-normalized verifier reward addition, while RACA further improves over uniform token allocation. Together, these results demonstrate that group-relative residual calibration can incorporate verifier outcomes without discarding dense token-level guidance. Code is available at https://github.com/SolereZhang/GC-OPD.