In an effort to reduce complexity, improve default rates, and increase the effectiveness of federal student loan subsidies, Rep. Tom Petri (WI-R) introduced the Earnings Contingent Education Loans Act of 2012 yesterday that would replace and restructure Federal Direct Student loans. The new loans would be unsubsidized and would require income-contingent repayment (ICR) for all borrowers through a system of payroll withholdings from earnings through the Internal Revenue Service (IRS), similar to federal tax withholdings.

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