# Token Utility for On-Policy Distillation via Local Trust-Region Optimization

arXiv: https://arxiv.org/abs/2610.18883 · HTML: https://mlsanity.com/paper/2610.18883/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in On-policy and self-distillation for LLMs, one of 12 directions in Knowledge distillation.
- Builds on 14 of its 17 references that are in the map.
- First posted on arXiv 1 Oct 2026.

## Placed in

- Knowledge distillation / [On-policy and self-distillation for LLMs](https://mlsanity.com/distill/on-policy-and-self-distillation-for-llms/)

## Builds on (most cited first, 14 of 14)

- [Proximal Policy Optimization Algorithms](https://mlsanity.com/paper/1707.06347/) (2017)
- [Trust Region Policy Optimization](https://mlsanity.com/paper/1502.05477/) (2015)
- [On-Policy Distillation of Language Models: Learning from Self-Generated Mistakes](https://mlsanity.com/paper/2306.13649/) (2023)
- [Beyond the 80/20 Rule: High-Entropy Minority Tokens Drive Effective Reinforcement Learning for LLM Reasoning](https://mlsanity.com/paper/2506.01939/) (2025)
- [Rethinking On-Policy Distillation of Large Language Models: Phenomenology, Mechanism, and Recipe](https://mlsanity.com/paper/2604.13016/) (2026)
- [Learning beyond Teacher: Generalized On-Policy Distillation with Reward Extrapolation](https://mlsanity.com/paper/2602.12125/) (2026)
- [Entropy-Aware On-Policy Distillation of Language Models](https://mlsanity.com/paper/2603.07079/) (2026)
- [MiniLLM: On-Policy Distillation of Large Language Models](https://mlsanity.com/paper/2306.08543/) (2023)
- [TIP: Token Importance in On-Policy Distillation](https://mlsanity.com/paper/2604.14084/) (2026)
- [Scaling Reasoning Efficiently via Relaxed On-Policy Distillation](https://mlsanity.com/paper/2603.11137/) (2026)
- [Not All Disagreement Is Learnable: Token Teachability in On-Policy Distillation](https://mlsanity.com/paper/2605.26844/) (2026)
- [Demystifying OPD: Length Inflation and Stabilization Strategies for Large Language Models](https://mlsanity.com/paper/2604.08527/) (2026)
- [Mismatch Matters: On-Policy Distillation Beyond Token Agreement](https://mlsanity.com/paper/2608.09836/) (2026)
- [Finding the Evidence: Discovering Decision-Supporting Tokens for On-Policy Reasoning Distillation](https://mlsanity.com/paper/2606.22830/) (2026)

## Abstract (arXiv)

Token-selection methods for on-policy distillation (OPD) prioritize student-visited positions using diverse signals, including uncertainty, teacher-student disagreement, and mismatch direction. We instead derive token importance from the distillation objective itself: how much can each position's loss decrease under an equal local KL budget on the student's predictive distribution? The answer is the utility st=gt^top Ft^dagger gt, where gt is the logit gradient and Ft is the categorical Fisher matrix. For reverse-KL it equals the student-weighted variance of the student-teacher log-probability ratio, and for forward-KL it equals the Pearson chi2 divergence, so the appropriate utility follows from the choice of objective. On shared training checkpoints, several independently motivated criteria, including student entropy, KL disagreement, and TIP, concentrate their importance on nearly the same positions as the derived utility at a 50% selection fraction, while diverging at stricter fractions and for direction-specific criteria. We instantiate the utility as Fisher Utility Weighting (FUW), a continuous, mean-normalized token weighting. Across seven mathematical reasoning benchmarks and three Qwen3 student-teacher pairs, FUW improves over matched uniform OPD under both reverse-KL (1.35-4.0 macro points) and forward-KL (1.08-2.71 macro points), and is competitive with existing selective methods using a single closed-form score derived from the training objective.