A plan that could lead to Illinois changing its student loan repayment programs is moving through the General Assembly. The new method would let students pay back loans based on their income, instead of a set schedule.
The model is a European one, often used in the U.K. and Australia, says sponsor Jack Franks (D-Marengo). Franks says he wants to prevent college grads from being shackled to large debt payments.
Currently, students have to begin making steady payment shortly after they graduate, whether or not they've found a job, and regardless of how much that job pays.
The representative says that leads to a growing student loan default rate, which impacts everyone.
"If they can't make those payments, they're not buying cars," he said. "They're not buying houses. And all of us are going to suffer in this economy because of this crushing debt."
Still, Franks isn't calling on the state to move toward that model. He merely wants Illinois' student assistance commission to analyze other states as they consider implementing income-based loan programs.
