6-16-14 petri-student loan repayment plan

Fond du Lac congressman Tom Petri is criticizing the Obama administration’s proposal to expand eligibility for the President’s Pay as you Earn repayment plan.  Petri says the President’s proposal goes in the wrong direction by taking a complicated, expensive repayment option and expanding it.   Petri says his proposal introduced earlier this year is designed to make the nation’s higher education system more streamlined, innovative and affordable.  Petri and U.S. Senator Marco Rubio introduced legislation that would encourage private investment in students as a way to finance postsecondary education.  Under an income-shared agreement graduates are paying an affordable percentage of their income over a specified time period.  Petri says investors would likely vary the percentage of income they ask for depending on the program’s track record, giving clear signals to students about what programs are most helpful to them as they enter the workforce.  Petri and Rubio wrote a letter this month that says with outstanding student debt topping a trillion dollars and the default rate on federal loans approaching 15 percent, many borrowers are finding themselves in a spiral of debt and financial ruin.  Petri says many of the defaults occur because the repayment burden is focused on the borrower’s initial years out of school when he or she is least equipped to bear it.