5 day forecast
National briefs: Student debt plan offered
Share with others:
NEW YORK -- Congress will consider overhauling debt collection in the $100 billion-a-year U.S. student loan program, replacing it with automatic withdrawals from borrowers' paychecks tied to their income -- a system used in Britain.
Legislation that Rep. Tom Petri, R-Wis., plans to introduce as soon as this week would require employers to withhold payments from wages in the same way they do taxes. Payments would be capped at 15 percent of borrowers' income after basic living expenses.
The bill follows growing concern about the burden of $1 trillion in outstanding student loans, which now exceed credit card debt. Under the new system, the government would no longer need to hire private debt collection companies and charge fees that add as much as 25 percent to borrowers' loan balances, leaving defaulted former students even deeper in the hole.
"This doesn't mean leaving taxpayers on the hook if a student borrows too much -- everyone would still pay back what they borrow under this system," Mr. Petri said in an email. "It does mean providing much stronger protections against the kind of financial ruin that is all too prevalent in our current system."
Since the money would be withdrawn automatically and tied to income, borrowers would no longer have to negotiate with collectors and loan servicing companies, which often offer a confusing array of deferral and forbearance options after a job loss or illness. The Education Department would manage the withdrawals.
MELVILLE, N.Y. -- The Federal Emergency Management Agency will release $190 million in disaster aid to help New York City recover from superstorm Sandy, New York's U.S. senators announced Tuesday.
This is the second funding announced by FEMA for recovery efforts in New York. Last week, FEMA said it would give Nassau County $16 million and the city of Long Beach $24 million to help pay for cleanup costs.
WASHINGTON -- Private property owners might deserve payment when public agencies temporarily flood their land, the Supreme Court ruled Tuesday in a case closely watched by farmers around the country.
Pleasing property-rights advocates, the court declared in an 8-0 decision that even temporary flooding can amount to a "taking" for which the Constitution requires compensation. The ruling in a case that arose from Arkansas will reach everywhere that government actions affect waterways.
"Because government-induced flooding can constitute a taking of property, and because a taking need not be permanent to be compensable, government-induced flooding of limited duration may be compensable," Justice Ruth Bader Ginsburg wrote.
A military judge was thrown off the Fort Hood, Texas, deadly shooting case after an appeals court Monday found that his treatment of the suspect, including an order to have the man forcibly shaved, indicated a lack of impartiality. ... Authorities in Arizona say they are considering criminal charges if the mother of an 11-year-old girl with leukemia -- who is at great risk for a deadly infection -- doesn't return her to a medical facility. ... The secretary of state is the acting governor of Arizona, his spokesman said Tuesday morning -- and, like most in the state Capitol, he has no idea where the actual governor, Jan Brewer, is.
First Published December 5, 2012 12:00 am
