Open class warfare: Student-loan payment may soon come directly out of your paycheck

Student-loan payment may soon come directly out of your paycheck

Your student loans Opens a New Window. could be automatically deducted from your paycheck each month if a new proposal from Republican Sen. Lamar Alexander Opens a New Window. becomes law.

In a speech that he delivered earlier this month, Alexander, R-Tenn., laid out a broad blueprint to completely overhaul the system for financial aid and student loan repayments Opens a New Window. — a plan that, if approved, could ultimately affect up to 40 million borrowers, who owe a collective $1.5 trillion in student loan debt.

Alexander, who chairs the Health, Education, Labor and Pensions Committee Opens a New Window. , proposed a repayment plan based on a borrower’s income. It would never require the borrower to make payments of more than 10 percent on their income, he said.

“And it makes sure if there were no money earned, there would be no money owed,” Alexander said. “And that would not reflect negatively on a borrower’s credit.”

The 78-year-old senator also proposed a 10-year payment plan, with equal monthly payments (similar, he said, to a 10-year mortgage).

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