GOP student loan plan would automatically deduct monthly payments from paychecks - Polidicks

https://www.cnbc.com/2019/02/13/a-gop-proposal-would-snatch-your-student-loan-payment-right-from-your-paycheck.html Student loan borrowers would have their monthly bills automatically deducted from their paychecks if a Republican-backed proposal becomes law. 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.) The plan quickly drew criticism from consumer advocates, who called it "mandatory wage garnishment." 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.

Let them eat cake 5/$1 ramen.

“Oh no! Milliniels are becoming too politically active! Quick, make them poor!...er!!”

I see no problem with this type of system if it's opt-in. We have something similar setup here in North Dakota via the state bank's loan system. You can effectively pay your loans off slowly and small increments over a few years. Mind you this bill also seems to be forcing it down people's throats with a 10% on income, which is fucking atrocious. 15-Year to 20-Year plans are the most productive as it's not dicking someone's ability to buy/invest into things. This will make sure that loans are repayed, but also that the ecomomy doesn't just become people paying off their loans.

Just fucking Kill us already for Fuck Sake. At least its fucking quick instead of a slow death of starving to death or freezing in the cold due to homelessness.

When the other option on the political table right now is not having crippling student debt in the first place it doesn't really sell well to say "aha well here's the solution: we'll just fucking take money from you more efficiently!"

10% of my income would literally mean I couldn't afford to live if I wasn't making money as someone actually using their education in the proper field with a proper career level job, so actually it would mean the economy is still just people paying off their loans. The problem isn't people not wanting to repay their loans, it's that a large portion of people in this country actually just fucking can't afford to do so. For me being the sole income provider in my home, 10% of my income currently would actually reduce me to just barely paying bills and being able to maintain my current grocery bills, which are a bit higher due to me being healthy but not obscene like I'm stocking up on junk or expensive luxury goods.

You guys did read the bit where I said "its fucking atrocious" right..? I'm totally against what the GOP is doing. I'm just stating that having a system similar to North Dakota's loan system would be a viable idea in comparison to lump payments.

Not a huge surprise this would come up, the countries economy is in part dependent on a student debt bubble that is overvalued and due to burst. Won't pass the house anytime soon thankfully.

The summary says it's 10% of "discretionary income", meaning income minus taxes, rent, utilities, and other necessary spending like food. How exactly that is defined for purposes of this bill is an area of definite concern (considering minimum wage isn't actually a living wage basically anywhere in the country) but in theory it would not in any way impact people who can't afford to repay their loans. I wouldn't trust a Republican-authored bill to actually have a reasonable definition of "discretionary income" - frankly, my expectations will be exceeded if it isn't just "disposable income" (post-tax income, but not accounting for any expenditures). The real issue is that this bill does nothing to solve the actual problems - it's forcing people who can pay back their loans to do so, but that's not actually something we have a problem with. Education costs have skyrocketed (at least relative to median income - it's not risen too much in terms of inflation-adjusted dollars). And far too many college graduates can't find jobs in their field - itself a problem more to do with rampant outsourcing and H-1B visa abuse than with the actual quality of graduates, no matter how much boomers want to blame it on millennials getting degrees in Feminist Dog Ballet or Classical Minoan Literature.

If it was a system like we've got in the UK it wouldn't be bad but what they're pitching is god awful.

Because they probably won't include Rent and Utilities.

This is out of date. The threshold was changed to 25k in 2011 when fees were raised. Still, UK fees are significantly lower than America's.

This is already a thing in NZ. I don't mind it. Since it takes out roughly 5-15 a fortnight. It's a really small percentage. I can see it being a issue if the repayments are fucking huge and you are already struggling to pay it back.

they do that here as well, but its a small amount and only if you are actually earning a fair bit of money. on my current job i don't earn half as much as i would need for them to take the payments out.

"You should get an education, it will help you get a job and a wage so you can eat something else than noodles" One education later Still eating noodles and do not get full pay

To provide some more context for this, in Australia there is the option to use a HECS-HELP loan for paying entry into university courses. The HELP loan does not have any interest applied to it and is only annually indexed to keep the loan's real value relative to the cost of living. To repay the loan, the government gives a compulsary repayment amount every finacial year with the repayment amount depending on how much you earn. This ranges from nothing at the lower end and 8% of the debt at the highest end. Similar idea to the article but executed a lot fairer.

I'd only trust this if it were on interest free government loans but that'd hurt a large chunk of the loan industry.

The deductions are done via national insurance iirc so the money is taken before other tax is calculated.

The reason this works in other countries is because 1.Tertiary education is heavily subsidised, 2. Loans are mostly from the government and 3. there is minimal to no interest on these loans (after all, tertiary education is meant to be a worthwhile investment by itself). It is usually meant to take less than 10 years to pay everything off. It sounds like the GOP's plan is to have young people bound by debt until they become statistically likely to vote more conservative..

"dis·cre·tion·ar·y in·come Dictionary result for discretionary income noun income remaining after deduction of taxes, other mandatory charges, and expenditure on necessary items. " Hah, good luck taxing a negative dollar value.

It was changed to 21k in 2011, then brought up to 25k last year. They then take 9% above this value. Also, the interest rates are 3%* + inflation, which right now is around 6-7% - definitely not low interest. *The 3% scales with your earnings, so it's just inflation at 25k, then around 50k it becomes inflation + 3%. This has the effect of making it basically impossible to pay off your loan unless you're earning 70k+ straight out of uni because the interest increases with your repayment. They're not worse than US student loans, but they're basically a clever way to apply 9% tax only to people who's parents aren't rich (which is probably what this proposed US system will turn into).

Surely the problem with student loans is people just forgetting to pay them 👍

The bill got sent to their summer home and they didn't see it.

So how's that 'small government' thing going GOP?

That's literally slavery.

Honestly, I'm waiting for the day where a shitload of debt holders say fuck it and just enmasse do not pay. Watch the industry go into a tailspin suddenly.

I'm not a fan of the policy proposal but really, you shouldn't be hyperbolic like that. Especially because it doesn't even come remotely close to the institution of slavery. Even in concept.

I'm glad I didn't fall for the college meme, I make shitloads of money driving trucks for a distribution company. I LOVE trucks, it's my dream job. I suggest you all at least try to learn a trade skill before going to college. You might like it, and almost all of them pay pretty well.

You should put serious thought into how you're going to handle the automation that is rocketing towards the trucking industry. Obviously everyone needs to be concerned about their jobs being automated away but I think some industries -- certainly ones involving human drivers -- are at most risk of being automated away before we've really figure out what to do about no jobs existing anymore.