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A Republican-backed proposal currently in the Senate could make automatic wage garnishment for your student loan payments become the law.


Sen. Lamar Alexander (R-Tenn.)—who is the chairman of the Senate Health, Education, Labor and Pensions committee—has proposed a massive overhaul to the to the student loan system, and the changes could have an impact on some 40 million people.

According to CNBC, the average student loan debt is around $30,000 currently. That’s up from $10,000 in the early ’90s. The country’s outstanding student loan balance is projected to reach $2 trillion by the year 2022.


There are currently 14 different ways those who owe student loans can pay their debt, but if Alexander has his way, that could soon be cut down to two, and both would involve your employer automatically deducting your student loan payments from your paychecks.

The two repayment options under Alexander’s proposal are as follows: under the first, a borrower’s monthly bill would be capped at 10 percent of their discretionary income—or what they have left after they pay all their bills each month. If a borrower does not earn income for any period of time, then no payment would be due, and it would not negatively affect their credit.

The second option would be to spread the repayment out over 10 years. Both options would require your employer to automatically deduct the funds from your earnings and send the money to the government.

Lamar believes his proposal (pdf) would streamline the student loan system and “protect” borrowers. He is also proposing “a new accountability system based upon whether borrowers are actually repaying their student loans.”


Consumer advocates have rightly criticized Lamar’s proposal and called it what it is—mandatory wage garnishment.

Lamar’s proposal is not without flaws. Reading his proposal, he does not seem to take into consideration that not everyone lives in the state of Tennessee, where the cost of living is significantly lower than that of someone living in Los Angeles or San Francisco.


Taking money automatically out of someone’s paycheck could cause them to have to make a choice between paying rent, keeping the lights on or buying food for their home. There is a reason that there are currently 14 different ways to repay student loans—we are not all operating from the same starting place.

There needs to be considerations and safeguards put into place that protect people who face hardships or have emergencies that could cause them to need to make a payment late or skip one altogether.


Putting everyone into the same cookie cutter algorithm where there is no consideration for individual circumstances is not the way to fix the country’s student debt problem.

Perhaps someone could propose lowering the cost of higher education instead.

Just a thought.