A new student loan program supported by President Bill Clinton would make student loans available to any student regardless of family income and make today’s Guaranteed Student Loans obsolete.

The change to direct college loans, if enacted by Congress, would end billions in subsidies now paid to banks, the Student Loan Marketing Association and others “in the complex web of today’s GSL program,” according to a news release.

Under the direct student loan program, repayment of loans would go through the Internal Revenue Service instead of through banks. “It would be an IRS payroll deduction, like social security,” said Christopher Ryan, press assistant for Sen. Paul Simon, D-Ill.

One of the goals of the plan is to reduce defaults on student loans. In an address to the nation Feb. 17, Clinton said his student loan program would give students “the option to pay the loans back, but at tax time, so they can’t beat the bill.”

The proposed plan allows repayments based on student’s income after graduation and should be universally available to all students. “Students could just apply for a loan and get it,” Ryan said.

“The changeover to direct loans with income-sensitive repayments ultimately will benefit millions of students, our schools and the taxpayers,” Simon said in a prepared statement.

Savings generated from cutting out the fees spent for commercial banks to operate the program go back into the pool to fund more student loans, Ryan said. “The program would expand opportunities for hundreds of thousands of students to get a loan,” he said.

However, the proposed student loan program does have drawbacks. “Presently the system is funded with money from lenders,” said Robert Clement, director of public information for the Illinois Student Assistance Commission. “The new program would be funded with government money. A concern of many taxpayers, with the deficit the country is facing, is where the government is going to get this money.”

Clement said the U.S. Congress has proposed a pilot program to test the new system on a selected number of schools. “This is a good idea,” Clement said. “It would probably be a mistake to go into this full-blown. We need to see how it works on a smaller scale.”

Clinton’s administration is looking to complete a phase-in of a direct-loan program by 1997.