Student loan bill would end debt collectors’ role
Congress will consider overhauling debt collection in the US student loan program, replacing it with automatic withdrawals from borrowers’ paychecks tied to their income — a system used in Britain. A bill that Representative Tom Petri, Republican of Wisconsin, plans to introduce would require employers to withhold payments from wages. Payments would be capped at 15 percent of the borrower’s income. The bill follows growing concern about the burden of $1 trillion in outstanding student loans. The government would no longer hire debt-collection companies and charge fees that add as much as 25 percent to borrowers’ loan balances.