On September 27, 2008, President Bush signed the College Cost Reduction and Access Act into law. This bill increases Federal Pell Grants by over $11 billion, providing need-based aid to low-income students who may otherwise not be able to attend college. The bill also creates new formulas for interest paid on student loans.
Of particular interest to Campus Compact’s members and civic engagement practitioners are the following provisions:
- Individuals who have worked in public service jobs for 10 years after October 1, 2007 are eligible for total forgiveness of the remainder of Federal Direct student loans.
- As of July 1, 2009, payment of student loans will not exceed 15% of an individual’s discretionary income, or 15% of the amount that an individual (and spouse)’˜s adjusted gross income exceeds 150% of the poverty line, divided by 12. After 25 years of repayment, the remainder of the loan balance is forgiven. Those who began paying an income-sensitive or income-contingent loan before this date will have the option of staying with their current payment plan or entering the new plan. (Information from the NASFAA summary; see link below)
- Funding is allocated to the states to administer college access and success programs. States can administer the programs themselves or grant the money to other organizations in the state that are administering these programs
