Graduates of a 2 or 4 year institution should have the ability to pay for their federal student loans from their pre-tax income. This helps graduates pay back their student loans, save on the overall cost of the loan, encourages completing your post-secondary education, and gives incentive to pay extra each year to meet a designated yearly limit. The amount should be capped at or around $4,000 per year, any number over that would be subject to the standard federal income tax.
For a student that graduates a 4 year college, the average debt is approx. $25,000, while in repayment at 6.8% interest for 10 years, the grad will pay over $7,000 in income tax (at 25%) to pay off interest and principle.