College Cost Reduction And Access Act Information
On September 27th, 2007 President Bush signed the College Cost Reduction and Access Act (CCRAA) (H.R. 2669) into law. Although the Act has ramifications for students at many levels of higher education, a few important items have been highlighted here for law students. (However, you may read the entire text of the law at http://kennedy.senate.gov/imo/media/doc/HR2669_conf_report.pdf )
CCRAA Update: NASFAA Provides Summary of Federal loans Rules
http://www.nasfaa.org/publications/2008/rnloansfinalrules102908.html
IBRinfo.org posts updates here: http://www.ibrinfo.org/updates.vp.html
Income-Based Repayment (IBR)
“Loan payments will be limited to 15 percent of a borrower's discretionary income or 15 percent of the amount that a borrower's (and spouse's if applicable) adjusted gross income exceeds 150 percent of the poverty line, divided by 12. Unpaid interest and principal are capitalized and any outstanding loan balance is forgiven after 20 years of repayment. Loan payments will be limited to 15 percent of a borrower's discretionary income or 15 percent of the amount that a borrower's (and spouse's if applicable) adjusted gross income exceeds 150 percent of the poverty line, divided by 12. Unpaid interest and principal are capitalized and any outstanding loan balance is forgiven after 20 years of repayment.”
While GradPLUS loans are eligible under this provision, PLUS loans (borrowed specifically by parents) and consolidation loans which include PLUS loans do not qualify. Most aspects of the IBR provision do not go into effect until July 1, 2009.
Loan Forgiveness
“Public service” employees who are employed in a “public service job” (“full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education, social work, public interest law services, child care, public library sciences, or any other job at an organization that is described in section 501(C)(3) of the Internal Revenue Code of 1986.”) have made 120 payments on their Direct Loan after 10/01/2007 as part of income-contingent or standard repayment based on a 10-year repayment schedule may have their outstanding balance paid by the Department of Education after the 10-year repayment period.
Economic Hardship
“The definition of economic hardship is also changed from 100% of the poverty line for a family of 2 to 150% of the poverty line applicable to the family size.”
Additionally you can find further information and perspective at the following websites:
National Association of Student Financial Aid Administrators (NASFAA)
http://www.nasfaa.org/publications/2007/G2669Summary091007.html
Equal Justice Works
http://www.equaljusticeworks.org/resource/ccraa
The Project on Student Debt
http://projectonstudentdebt.org/initiative_page_view.php?initiative_idx=&initiative_page_idx=22
The American Bar Association
http://www.abanet.org/abanet/media/oped/oped.cfm?releaseid=191
http://www.abanet.org/media/youraba/200710/article03.html
The Wall Street Journal
http://online.wsj.com/article/SB119206289655155389.html
Professor Philip Schrag from Georgetown Law, who had a major impact on the creation and passing of H.R. 2669, has written an in-depth article about the CCRAA which can be found at http://www.law.georgetown.edu/news/releases//documents/Forgiveness_000.pdf
Frequently Asked Questions Regarding Public Service Loan Forgiveness