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October 03, 2007
College Cost Reduction and Access Act of 2007
Last week President Bush signed the College Cost Reduction and Access Act. The Act cuts lender subsidies and redirects the savings toward programs intended to improve college access and affordability for low-income students. Importantly, it protects borrowers from excessive repayment burdens and provides loan forgivenness for public service employees, including lawyers.
The legislation contains a new Income Based Repayment program intended to protect students from excessive student loan debt burden after graduation. It caps monthly loan payments at 15% of discretionary income for all federal loans made to students (including graduate/law students). Also, borrowers who spend at least 10 years working in public service professions and make income-based payments thorugh the Direct Loan program would be eligible to have their remaining loan balances forgiven after 10 years. Professions with the government and 501(c)(3) organizations are included.
Posted by smp20 at October 3, 2007 08:57 AM