Our very own U.S. Rep. Tom Petri (R-6th District WI) has introduced a bill in Congress to create a new income based student loan payment system. I generally like the concepts Rep. Petri proposes, and some of them are described his commentary in the Chronicle:
In my proposal, payment amounts respond in real time to changes in income without all the paperwork, and borrowers can have their employers deduct their payments as a simple percentage of their paychecks. A borrower who loses his job need take no action to notify a servicer or the government. Much like taxes, withholding means you pay your obligation as you earn every dollar, and your obligation ceases automatically during periods when you have no income.
The point of using withholding is not to save borrowers the trouble of writing a check. It’s to eliminate much of the administrative complexity that makes current [income based repayment plans] cumbersome for borrowers to use. Similar reforms, put in place years ago in Australia, New Zealand, and Britain, have been shown to work.
As usual, check out the reader comments under his essay. They point out that this may just mask the real problem–the cost of higher education. Sometimes reader comments can be frustrating, but if you sift through them you can glean some interesting points.