A republican backed proposal for student loans debt repayment could become law if it passes.
A report from CNBC says a massive overhaul to the student loan debt system is in order. The average debt per student is around $30,000 that’s almlst 30% more debt than it was in the 90’s
Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, laid out the details of the massive overhaul to the student loan system in a speech earlier this month. The changes could affect some 40 million people.
Under Alexander’s proposal, there would be just two repayment routes: one in which borrowers’ monthly bills are capped at 10 percent of their discretionary income and another that spreads their payments out over a decade. Employers would be responsible for taking the funds from their employees’ paychecks and sending them to the government. (Of course, student loan borrowers currently can set up automatic payments with their lender. They also typically get a discount on their interest rate for doing so.)
So far there is no indication rather or not this will be a pre tax deduction. Because if it isn’t pre tax it could financially hurt 40 million people already struggling with making payments.
“It makes sure if there were no money earned, there would be no money owed and that would not reflect negatively on a borrower’s credit,” ~ Senator Alexander
If this goes into law, do you think it would help or hurt thoes effected? We would like to hear from you. Tweet us @BloggsGq..