Chile, these student loan payments are already keeping my pockets low, now they want to take them right out of my paycheck? Now, this about to be a problem, problem! According to CNBC, lawmakers are proposing a massive overhaul to the student loan system. Borrowers’ monthly loan bills would be automatically deducted from their paychecks, which quickly drew criticism and is being called “mandatory wage garnishment.
If the bill is passed, it would affect about 40 million people. As of now, the average graduation is currently around $30K. The nations’ student loan balance is projected to increase to $2 trillion by 2022.
Here’s what to expect if If Sen. Lamar Alexander’s proposal becomes a bill: 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.)
Critics of the proposal say that payments should always be voluntary, and that people need the flexibility to default on their student loans. One in 5 borrowers are in default or delinquency on their student debt.
I understand that student loan debt is an issue and a debt must be paid by the borrower, but I also feel like college is expensive and in many cases, a degree doesn’t ensure nor prepare you for a good paying job. I know so many people with huge student loan debt and they can barely find a job, let alone in their field that pays enough to live and afford to pay their loans back.
What are your thoughts? Are you for loan payments being taken out of your paycheck to decrease our national student loan balance? Take the poll below or leave a comment on our Facebook page.