Report: "The Case for Payroll Withholding"
Organizations: New America Foundation, Young Invincibles, National Association of Student Financial Aid Administrators
Summary: With student-loan default rates rising, a growing number of policy makers, think tanks, and advocacy groups are calling for automatically enrolling some or all borrowers in income-based repayment, or IBR. In this report, a product of the third round of the Reimagining Aid Design and Delivery project, financed by the Bill & Melinda Gates Foundation, the authors compare four distinct, and progressively more "automated," ways of expanding the program.
Bottom Line: Automated IBR with employer withholding of payments would simplify the student-loan repayment system and reduce the risk of missed payments. Still, automatically enrolling borrowers in IBR is difficult, and any haphazard approach could make the federal loan-repayment system worse. In the coming months, the authors will release another report examining the "barriers and challenges" to adopting automatic IBR with employer withholding.
Read more at The Chronicle of Higher Education: http://chronicle.com/blogs/ticker/to-reduce-defaults-try-auto-ibr-report-says/91325