Loan Repayment Relief from Financial Aid Administrators

Lynn Russo Whylly's picture

A House bill, the Earnings Contingent Education Loans (ExCEL) Act of 2012, attempts to reduce complexity, improve default rates, and increase the effectiveness of federal student loan subsidies—and would dramatically alter the way federal student loans are paid back. On Dec. 17, Rep. Tom Petri (R-Wis.) introduced the bill, which would provide unsubsidized loans and require income-contingent repayment for all borrowers through a payroll withholdings system. This would shift subsidy benefits from the front end (by eliminating all interest subsidies) to the back end (by providing relief to borrowers who need it based on their actual circumstances during the repayment phase of the loan).