College Cost Reduction and Access Act

The College Cost Reduction and Access Act (CCRAA) of 2007 will take effect and includes provisions to make undergraduate and graduate education more affordable for aspiring social-impact professionals.

The CCRAA is a complicated piece of legislation that, if you take advantage of it, can help you retire college and grad school debt early.

The main programs that the CCRAA has created include:

Income-Based Repayment (IBR) — Caps monthly direct and guaranteed (FFEL) student loan payments based on the borrower’s income and family size. According to IBRinfo, “For most eligible borrowers, IBR loan payments will be less than 10 percent of their income – and even smaller for borrowers with low earnings. IBR will also forgive remaining debt, if any, after 25 years of qualifying payments.” Besides taking out the right kind of loan to start with (or consolidating your loans into the Direct Loan Program), it’s important to note that if you get married, your spouse’s income counts when calculating your monthly payment.

Public Service Loan Forgiveness (PSLF) — Retires the direct or guaranteed (FFEL) student loan debt of public service professionals who’ve been making ten years of qualified payments on their loans. Counting as “public service” includes 501(c)(3) nonprofit employment; government (federal, state, local, tribal), military, public school and college employment; and national service participation (like AmeriCorps and Peace Corps).

You can put both of these new programs to work for you — so you can make income-contingent payments for ten years, and then retire your debt, if you qualify for participation. Also note that it’s really all up to you to access the programs and to keep track of your payment and employment records so that you can prove your eligibility.