U.S. Senator proposes plan to take student loan payments directly from paychecks
WASHINGTON, D.C. – U.S. Senator Lamar Alexander (R-Tenn.) is proposing a new way for the federal government to collect student loan payments.
In a recent speech, he pitched the idea of having payments taken directly out of the borrower’s paycheck each month, just like federal taxes.
This would be done in one of two ways:
- The repayment plan would be income based and would never require the borrower to make payments of more than 10% of their discretionary income. If there was no money earned, then there would be no money owed. It also wouldn’t hurt their credit score.
- The 10-year payment plan, with equal monthly payments, would be very similar to a 10-year mortgage.
According to Senator Alexander, last year, 60% of the country’s 20 million college students received federal aid — $28 billion in grants and $90 billion in new loans.
He went on to mention that he still supports the current law, which forgives federal student loans after 20 years.
He concluded his speech by saying, “It is our responsibility to take whatever steps we can to help students afford college and make sure that the degrees they earn are worth the time and money they pay for them.”
To read the speech in full, CLICK HERE.