Congress considers aid plan

By STEPHEN GLASS U.S. Representative Tom Petri has an idea. His idea could revolutionize the nation's student loan system while saving the federal government billions of dollars, Petri said. IDEA, formally called the Income-Dependent Education Assistance Act, would set the rate at which students repay their educational loans based on their incomes after leaving school. Under IDEA, most students could borrow a total of $70,000 for their undergraduate and graduate studies and would repay loans through a complicated formula that would be based on their income. "The loan repayment is based on your income," said George Conant, a legislative assistant to Petri (R-Wis.). "If you are not making that much money you are not going to be required to pay what you can not afford." The government would not schedule repayment on a fixed schedule, but rather would continuously recalculate it to make it affordable. Conant added that most loans would take 12 to 16 years to repay and that any balance which was not repaid within 25 years would be excused. "You could raise kids and take time off from work without being concerned about your loans," Conant said. Conant noted that medical students, who often are unable to repay their loans when first entering practice, would be eligible for $143,000, more than double that of their peers in other professions. "Now medical students take out loans and then have to begin repaying them right away and it can amount to 85 percent of their income, so they default," Conant said. "Later they are making $200,000 to $300,000." The bill is currently being heard in the U.S. House of Representatives' Post-Secondary Education Subcommittee and has nearly 80 sponsors, including leaders from both political parties, Conant said. The loans would also be collected through the students' normal income tax filing by the Internal Revenue Service, which Petri believes would cut down on defaults from people who can afford to pay, but choose not to. Conant also said the federal government could probably lower the default cost by $1 billion annually with IDEA. The U.S. Department of Education is anticipating losing $3.6 billion in student loan defaults this year. Student Financial Services Director William Schilling said an income-dependent loan program has its advantages. Schilling declined to say whether he approved of IDEA since he was not aware of its specifics. A companion bill has been introduced in U.S. Senate by Sen. Paul Simon (D-Ill.) and Sen. Dave Durenberger (R.-Minn.).

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