Student debt relief on horizon
G. Keith Evans
Issue date: 4/24/09 Section: News
If you are reading The Sandspur, you likely know two truths to be beyond repute: Rollins College is an excellent school, and a Rollins education is very expensive. For the numerous students who may be supplementing their school payments with student loans, though, there may be a glimmer of hope sparkling on the horizon.
On July 1, new legislation governing student loan repayment and forgiveness will go into effect. Signed into law nearly two years ago (no, this bill can not be attributed to the Obama administration), the College Cost Reduction and Access Act (CCRAA) has been termed by insiders as "probably the most significant breakthrough in public interest law in a generation."
Under the CCRAA, graduates with student loan debt may take advantage of a new income-based repayment plan. While student loan lenders have traditionally been exceptionally flexible in working with students on repayment, granting forbearances as necessary, the new legislation provides even more flexibility. Under the income-based repayment plan, for example, repayments will amount to less than ten percent of income for most borrowers.
Even with such a low percentage, some borrowers may still have trouble making regular payments, especially in the period immediately following graduation. For these situations, the CCRAA allows for a "Partial Financial Hardship" repayment plan; under this arrangement, a partial financial hardship exists when the annual amount due in payments amounts to more than 15 percent of discretionary income--regardless of just how high the income may be. In such a circumstance, borrowers may qualify for a significant reduction in required monthly payments.
Even more interesting for some students is the prospect of complete loan forgiveness. By simply giving back to the community, students are eligible to have a portion of their student loans wiped away. To qualify, graduates must be employed by a "public service organization" for ten years, and must make regular monthly payments on their student loans during this time. After the ten years have elapsed, and all 120 payments made, any remaining student loan debt will disappear.
What qualifies as public service employment? According to the Web site for Equal Justice Works, the organization that dispenses valuable information on the CCRAA, qualifying public service employment is "full-time paid work in the government; a 501(c)(3) nonprofit; an AmeriCorps position; the Peace Corps; or for a private 'public service organization.'" A few additional conditions, such as definitive "full time" employment and applicable loan types, do apply, and the specific details are outlined on the Equal Justice Works
Web site. The site also offers an intriguing comparison of salaries in relevant public interest roles.
For more information, or to subscribe to a podcast on getting credit for loan payments, visit the Equal Justice Works Web site at www.EqualJusticeWorks.org.
On July 1, new legislation governing student loan repayment and forgiveness will go into effect. Signed into law nearly two years ago (no, this bill can not be attributed to the Obama administration), the College Cost Reduction and Access Act (CCRAA) has been termed by insiders as "probably the most significant breakthrough in public interest law in a generation."
Under the CCRAA, graduates with student loan debt may take advantage of a new income-based repayment plan. While student loan lenders have traditionally been exceptionally flexible in working with students on repayment, granting forbearances as necessary, the new legislation provides even more flexibility. Under the income-based repayment plan, for example, repayments will amount to less than ten percent of income for most borrowers.
Even with such a low percentage, some borrowers may still have trouble making regular payments, especially in the period immediately following graduation. For these situations, the CCRAA allows for a "Partial Financial Hardship" repayment plan; under this arrangement, a partial financial hardship exists when the annual amount due in payments amounts to more than 15 percent of discretionary income--regardless of just how high the income may be. In such a circumstance, borrowers may qualify for a significant reduction in required monthly payments.
Even more interesting for some students is the prospect of complete loan forgiveness. By simply giving back to the community, students are eligible to have a portion of their student loans wiped away. To qualify, graduates must be employed by a "public service organization" for ten years, and must make regular monthly payments on their student loans during this time. After the ten years have elapsed, and all 120 payments made, any remaining student loan debt will disappear.
What qualifies as public service employment? According to the Web site for Equal Justice Works, the organization that dispenses valuable information on the CCRAA, qualifying public service employment is "full-time paid work in the government; a 501(c)(3) nonprofit; an AmeriCorps position; the Peace Corps; or for a private 'public service organization.'" A few additional conditions, such as definitive "full time" employment and applicable loan types, do apply, and the specific details are outlined on the Equal Justice Works
Web site. The site also offers an intriguing comparison of salaries in relevant public interest roles.
For more information, or to subscribe to a podcast on getting credit for loan payments, visit the Equal Justice Works Web site at www.EqualJusticeWorks.org.
Be the first to comment on this story