Representative Tom Petri, a Wisconsin Republican, introduced a bill in Congress on Monday that would restructure federal student loans, making all repayment income-based and withholding payments directly from borrower's paychecks through the Internal Revenue Service. The loans would be unsubsidized. Petri, who was an early supporter of direct lending, has proposed such a program before with little result; his latest bill, H.R. 6674, has no cosponsors.

Justin Draeger, president of the National Association of Student Financial Aid Administrators, said he supported the bill, arguing it could "nearly eliminate student loan default." A similar system is used in Australia and has occasionally been mentioned as a model for the United States as concern about student debt has grown.