Congress plans student loan overhaul

According to Bloomberg, Congress is now considering a major alteration to the federal student loan program in the U.S., which would automatically remove money from a borrower’s checking account at a rate based on his or her salary. This system is already practiced in the U.K., and is expected to make payment more manageable, capping at 15 percent of a borrower’s income after basic living expenses.

In this system, the government would not hire private collectors to manage payments, which typically adds 25 percent to borrowers’ loan balances. Rep. Tom Petri insisted “this doesn’t mean leaving taxpayers on the hook if a student borrows too much — everyone would still pay back what they borrow under this system,” although this remains unclear.

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