A Wisconsin Congressman is proposing a change in the way people repay student loans after they finish college. US Representative Tom Petri (R-WI) says something needs to be done, because the default rate is climbing as graduates struggle to find a job.
The Fond du Lac Republican plans to introduce a bill next year that would require those with student loans to have payments automatically withheld from their paychecks when they find a job. Deductions would be capped at 15 percent of wages, if someone is making at least $16,000 a year or 150 percent of the federal poverty level.
AUDIO: Rep. Tom Petri (:21)
Petri says England, Australia, and New Zealand have similar programs, and they have a 98 percent loan compliance record. He says the US failure rate is around 15 percent and the outstanding student loan debt of over $1 trillion exceeds what’s owed on credit cards.
Rick Schuh, WHBY