Submitted by Terry Nagel on March 24, 2009 - 12:46pm.
The College Cost Reduction and Access Act, passed into law in 2007, provides incentives for lower-income older workers who want to get more training, but don't want to be saddled with long-term debt. Those who work in public service may have part of their loans forgiven. Key provisions include:
Pell Grant increase - It increases the maximum federal grant to $5,400 by 2012.
Income-based repayment - It assures past, present and future students with federal loans that their payments will be manageable and will not extend indefinitely.
Interest rate cut - The law phases in a reduced interest rate on new subsidized Stafford loans. It will be reduced from 6.0 percent to 5.6 percent starting July 2009, to 4.5 percent starting July 2010 and to 3.4 percent starting July 2011. In July 2012 it will revert to the original 6.8 percent unless Congress acts.
Public Service Loan forgiveness - Borrowers who spend at least 10 years working in public service professions and make certain payment will be able to have any loan balance that remains after 10 years forgiven. For details, see IBRinfo.org.
The College Cost Reduction
The College Cost Reduction and Access Act, passed into law in 2007, provides incentives for lower-income older workers who want to get more training, but don't want to be saddled with long-term debt. Those who work in public service may have part of their loans forgiven. Key provisions include:
An article by Professor Philip G. Schrag of Georgetown University explains the law in greater detail.