Campus Compact

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The College Cost Reduction and Access Act, which includes provisions to allow students better access to college and an improved ability to pay off post-education debt, is now fully in place. Although George W. Bush signed the act into law in 2007, many pieces of the act became active only in July 2009. Much of this information is still being developed, and students are largely unaware of the significant financial benefits now available to them. Campus Compact has created a guide to help members navigate the details of this law, including summaries of key provisions, tips to help students get the most out of the plans, and helpful links for further information. Briefly, the act includes two debt forgiveness plans, one based purely on the financial ability to pay and one based on career choice. The Income Based Repayment plan, which became active on July 1, 2009, is arguably the best loan-repayment plan available today for students with a high debt-to-income ratio. The Public Service Loan Forgiveness plan allows for total loan forgiveness after 10 years of payments for students working for nonprofit or governmental organizations. Campus Compact is supportive of this law and committed to its promotion for the benefit of students. We hope that you will find the information in this guide helpful and will pass it along to students on your campus that may benefit. Back to top A number of loan repayment plans are available, but the Income-Based and Income-Contingent plans are among the best because they allow students to make payments based on their income and family size. Further, these plans allow for loan forgiveness after either 10 or 25 years depending on career choice. Traditional repayment plans allow for only 10 years of repayment and are often unmanageable for people starting work with relatively low salaries. Quick Tips for the Income-Based Repayment Plan -Under a 25-year repayment plan you may owe more money due to interest accumulation than if you paid in 10 years; however, payments will be lower throughout. -It is possible to be making a substantial salary, even into six figures, and still qualify for Income-Based Repayment depending on your debt level. -You may choose to file taxes as “married filing separately,” which allows you to have the adjusted gross income calculated solely on one person’s income instead of two. This will allow for lower monthly payments. Income-Based Repayment This repayment plan allows for the lowest monthly payments and is ideal for those who have a high debt-to-income ratio. -http://www.ibrinfo.org/calculator.php. - - - -www.ibrinfo.org or http://www.nchelp.org/initiatives/IBR/IBRImplementationGuide05112009.pdf

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