Independent U.S. Sen. Angus King is working with a Republican colleague to overhaul federal student loan repayment programs. The average loan debt for Maine students attending four-year colleges is just over $29,000 a year - the seventh highest total in the nation.
Earlier this month, President Barack Obama signed an order allowing some borrowers who signed loan agreements with the federal government before 2007 to pay no more than 10 percent of their income in monthly payments. Sen. King's proposal would set that threshold at 15 percent and introduce a simplified, income-driven repayment plan.
King was part of the bipartisan group of senators that struck a deal a year ago on a bill to lower the interest rate on student loans. But that measure, signed by the president, didn't take on the structural reforms that King says are needed to address a debt crisis that's threatening the nation's economic future.
"Young people graduating from college - the way I characterize it is they have a mortgage with no house," King says. "And it's having an effect on the economy. People are literally not able to buy houses."
King says the problem needs to be addressed sooner rather than later. So in recent weeks, he's been brainstorming with one of the colleagues he collaborated with last summer, North Carolina Republican Sen. Richard Burr. King says the two have come up with an idea they think we'll attract bipartisan support.
"And basically what it does is simplifies the repayment schedule, and makes what's called 'income-based repayment' more widely available," King says. "And instead of seven choices that were very confusing, we've narrowed it down to one."
Under the plan, people with up to $57,000 in student debt prior to repayment would have to make 20 years of payments before their loan could be forgiven. People with over $57,000 would have to make 25 years of payments. And the payments would be calculated in a way that would ensure that borrowers never pay more than 15 percent of their monthly income over the life of the loan.
The proposal would also require the U.S. secretary of education to let all borrowers know about the different repayment options available to them. King, though, says he's realistic about how challenging it could be to get a broad bipartisan coalition to support the bill in the Senate, at least this year.
"I've talked to the folks in both caucuses and there seems to be a lot fo support," King says. "But everything around here is now being viewed in the context of elections."
Still, King says he gives the proposal a slightly better than 50-50 chance of making it through Congress in bill form this year. These days, he says, those are pretty good odds.