Student Loan to be taken out of paycheck based on earnings?

[jeffrey]

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 the U.K.

Legislation that Wisconsin Republican Representative Tom Petri 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...

Student-Loan Collection Targeted for Overhaul in Congress - Bloomberg

[bjl584]

I'm not sure if this is a good idea or not. There seems to be a lot of potential for unintended consequences. If your payment is automatic and is capped at a certain percentage of income, then where is the incentive to be responsible with lending money for school. Someone could end up paying back SL debt for the rest of their life and not even care because the payment would be low.