The College Cost Reduction and Access Act (H.R. 2669) was signed into law on September 27, 2007. The Act provides debt relief for graduates who are repaying federal student loans. 

The Office of Financial Aid will continue to keep students abreast of the details of this new legislation and the ramifications it will have on loan repayment. In the meantime, we have created this website to provide you with information about the Act. We also welcome students with questions to stop by the office. 

There are two major provisions of the new law that will impact law students and graduates: 

Income-Based Repayment

Section 203 of the Act creates a new loan repayment option that reduces monthly federal loan payments for all high debt/low income borrowers. Income-based repayment (IBR) places an annual ceiling on federal loan payments which is based on the borrower’s income. This portion of the law is scheduled to take effect on July 1, 2009. 

In general, loan payments would be limited to 15% of discretionary income, where discretionary income is defined as adjusted gross income minus 150% of the poverty level for the borrower’s family size. For more detailed information on the formula used to determine the monthly payment, utilize the IBR calculator on finaid.org. 

In addition to reducing the monthly payment required, the income-based repayment program also requires the government to pay any unpaid interest on the subsidized portions of the loans for up to three years after the borrower elects the IBR option.   

After 25 years of payment, the government will write-off any unpaid principal and accrued interest. 

More detailed information on Income-Based Repayment can be found in the full text of the College Cost Reduction and Access Act, the final regulations issued October 23, 2008, and in the analysis by Philip G. Schrag, Professor of Law and Director of the Center for Applied Legal Studies at Georgetown University. See below for links. 

Loan Forgiveness

The College Cost Reduction and Access Act creates federal loan forgiveness for graduates working in a broad category of public-service jobs. 

Generally speaking, a public service job is defined by the Act as a full-time job in public interest law services, government, military, emergency management, public safety, law enforcement, public health, public education, social work, child care, public library sciences, or any other job at a non-profit 501 (c)(3) organization. The final regulations issued October 23, 2008 provide some additional guidance on eligible employment types.

The government will forgive any outstanding federal loan balance once you have made 120 loan payments (generally, 10 years) while working in an eligible public service position. This portion of the law is scheduled to take effect on July 1, 2009. However, graduates making payments on a Direct Loan can begin “counting” their 120 payments as of October 1, 2007.  Students will be advised of the best way to begin taking advantage of this upon graduation.  Any loan payment made prior to graduation would not be included in the ten year period for forgiveness, so students need not be concerned with this now. Students who have graduated would be required to consolidate their federal loans into the Direct Loan Program to be eligible for the forgiveness. Graduates are eligible to consolidate with Direct Loans as of July 1, 2008.   

More detailed information on the loan forgiveness provisions can be found in the full text of the College Cost Reduction and Access Act, in the final regulations issued October 23, 2008, and in the analysis by Philip G. Schrag, Professor of Law and Director of the Center for Applied Legal Studies at Georgetown University. See below for links. 

Final Regulations issued by Department of Education on October 23, 2008 (pdf)

Full text of the College Cost Reduction and Access Act of 2007 (H.R. 2669)

Article: Federal Student Loan Repayment Assistance for Public Interest Lawyers and Other Employees of Governments and Nonprofit Organizations (PDF), 36 Hofstra Law Review 36 (1). Philip G. Schrag.
This article provides an analysis of the College Cost Reduction and Access Act by Philip G. Schrag, Professor of Law and Director of the Center for Applied Legal Studies at Georgetown University.

Equal Justice Works Podcast: The Student Debt Relief Series is available for listening, streaming, download or subscription. The first episode is "How to Figure Out if You Benefit from the College Cost Reduction & Access Act - and How Much?"

Equal Justice Works Summary of the College Cost Reduction and Access Act and Resource Page

IBRinfo.org - Project on Student Debt's web site specific to Income-Based Repayment (IBR) and Public Service Loan Forgiveness. Register your email to receive notification of important developments.

PROJECT ON STUDENT DEBT:

Key Provisions in H.R. 2669

Fair and Manageable Loan Payments

Q&A About Income Based Repayment

Frequently Asked Questions Regarding Public Service Loan Forgiveness

Detailed public service loan forgiveness information from finaid.org

National Association of Student Financial Aid Administrators (NASFAA) Summary of the College Cost Reduction and Access Act

Income Based Repayment Plan calculator from finaid.org

Direct Loan Consolidation Web Site

Direct Loan Consolidation Process Information