As a lender, the federal government has powers of collection that would make Guido the Mafia Loan Shark blush. For example, they are asking to take your money before you ever see it.
Student Loan debt in the U.S. recently crossed the $1 trillion mark, with a good chunk of that owed to the U.S. government. In an attempt to streamline the whole process, a soon-to-be-introduced bill would replace the current system of debt collection with automatic payroll deductions tied to the borrower’s income.
Similar systems are already in place in the U.K., Australia, and New Zealand, and Wisconsin Representative Tom Petri plans to introduce the idea to Congress as soon as this week, reports Bloomberg.
Rather than paying huge fees to third-party bill collectors, the government would debit borrowers’ paychecks at an amount capped at 15% of income after basic living expenses.
Don’t borrow money from organized crime or the government.