Skip to main content
Accessibility|Contact|Privacy|Terms of Service

New Student Loan Repayment Plan Proposed by Federal Government

  • Published: 2013-01-06 : Author: The Golden Law Group
  • Synopsis: U.S. government considering change to student loan repayment system hoping the move will reduce default rates while improving fairness in the system.

Main Document

The U.S. is considering a change to the student loan repayment system that would make automatic withdrawals from borrowers' paychecks.

These days, it is nearly impossible to leave college without having taken out some student loans. Unfortunately, given the job market, finding a job to pay back those loans can seem like an equally daunting task.

The federal government is considering a change to the student loan repayment system, hoping that the move could reduce default rates while improving fairness in the system. The proposal, which is modeled after the loan repayment system in the United Kingdom, would make automatic withdrawals from borrowers' paychecks. Loan payments would be tied to borrowers' income levels, and would max out at 15 percent of income once basic living expenses are deducted.

The program would be administered by the U.S. Department of Education, meaning that private debt collectors could eventually be phased out of the student loan system altogether. The Education Department does have experience collecting on student loans - currently, the department is responsible for garnishing wages and government payments to repay defaulted federal student loans.

The change is intended to help former students deal with what can sometimes be staggering debt loads. Americans own more than $1 trillion in student loan debt. There is now more student debt than credit card debt in the United States.

An increasing number of borrowers are falling behind on their debt obligations. Loan defaults are more than twice as large now as they were in 2003. In 2011, approximately 5 million student loan borrowers in the United States were in default on their loans. Proponents of the new plan argue that approximately 98 percent of borrowers would be able to keep up with their payments if they could participate in an income-based automatic repayment program.

Repaying student loans

Unlike most debts, student loans are not dischargeable in bankruptcy. Therefore, it is important the borrowers be careful about taking out more loans than they can afford and making an effort to repay them once they are out of school.

If you have recently finished school, keeping the following tips in mind can help you stay on top of your loan payments:

If you end up in financial trouble, do not wait to take action.

There are a number of options available for struggling debtors, including deferrals and income-based repayment. If you are also having problems other forms of debt, you may find it helpful to talk with a bankruptcy attorney who can help you explore debt relief options.

Article provided by The Golden Law Group Visit us at

Similar Topics

1 : Student Loan Discharge Process for Disabled Veterans Made Easier : U.S. Department of Education.
2 : UTA Grant to Help Minority Students Link Assistive Technology with Disability Studies : University of Texas at Arlington.
3 : CSD Learns Awarded $75,000 Grant from Wells Fargo : Wells Fargo and Company.
4 : Adults with Disabilities Remain Outside Economic Mainstream : National Disability Institute.
5 : Finance Now Available on Mountain Trike All-terrain Products : Mountain Trike Company.
From our Loans Grants and Finance section - Full List (97 Items)

Submit disability news, coming events, as well as assistive technology product news and reviews.

Loan Information for low income singles, families, seniors and disabled. Includes home, vehicle and personal loans.

Famous People with Disabilities - Well known people with disabilities and conditions who contributed to society.

List of awareness ribbon colors and their meaning. Also see our calendar of awareness dates.

Blood Pressure Chart - What should your blood pressure be, and information on blood group types/compatibility.

1 : Teaching Baby Sign Language - Nita, Show Us More
2 : MitoQ Novel Antioxidant Makes Old Arteries Seem Young Again
3 : Telemedicine Helps Overcome Healthcare Gender Based Barriers
4 : Screen Reader Plus Keyboard Helps Blind, Low-Vision Users Browse Modern Webpages
5 : Our Digital Remains Should be Treated with Same Care and Respect as Physical Remains
6 : Tungsten: Concern Over Possible Health Risk by Human Exposure to Tungsten
7 : Student Loan Discharge Process for Disabled Veterans Made Easier
8 : Growing Bone and Cartilage Tissues for Humans from Flaxseed Like Particles

Disclaimer: This site does not employ and is not overseen by medical professionals. Content on Disabled World is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of a physician or other qualified health provider with any questions you may have regarding a medical condition. See our Terms of Service for more information.

Reporting Errors: Disabled World is an independent website, your assistance in reporting outdated or inaccurate information is appreciated. If you find an error please let us know.

© 2004 - 2018 Disabled World™