Eliminate loan “rehabilitation”, the long and onerous procedure that defaulted borrowers must presently undertake prior to engaging in REPAYE. Just place them in REPAYE instantly.
Enable the IRS to directly provide income data into the Department of Education for purposes of implementing REPAYE. Or, even better, allow for loan repayment through the withholding system utilized to get payroll and taxes, amending Form W-4 to inquire of about student education loans, and enabling self-employed people to upgrade re re re payments according to their quarterly profits. It’s perhaps not a panacea, nonetheless it would make life easier and simpler for borrowers.
Clean the credit reporting up of defaulted or delinquent borrowers signed up for REPAYE. Particularly if loan re payments could be made through payroll withholding, borrowers shouldn’t be involuntarily defaulting or delinquent due to difficulty or jobless. Eliminating the training of reporting these durations as defaults or delinquency would remove a vital barrier borrowers face if they seek usage of credit as time goes by.
Then, end the Treasury Offset Program—the system that confiscates defaulted borrowers’ tax refunds—and stop wage and Social protection garnishment for education loan borrowers signed up for REPAYE. The current program effectively cancels the largest social insurance program for working, low-income families, plunging them into deep poverty because the Treasury offsets refunds of the Earned Income Tax Credit or Child Tax Credit. Continue reading “Then there are several practical steps to take if universal and automatic REPAYE is the goal”