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College Cost Reduction And Access Act

College Cost Reduction And Access Act

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People are remembering the College Cost Reduction and Access Act today.

The below text shows the Department of Education Student Loans' College Cost Reduction and Access Act passed in 2007 under the Bush Administration.But as examined below by LALATE, a major change in the Act on repayments comes into effect in just days.First, the bill gradually cuts interest rates on subsidized Stafford loans for undergraduate students in half according to the following schedule:* 6.8 percent for loans first disbursed July 1, 2006 to July 1, 2008 * 6 percent for loans first disbursed July 1, 2008 to July 1, 2009 * 5.6 percent for loans first disbursed July 1, 2009 to July 1, 2010 * 4.5 percent for loans first disbursed July 1, 2010 to July 1, 2011 * 3.4 percent for loans first disbursed July 1, 2011 to July 1, 2012If you are in the armed services, the Act also allows you to defer as a member of Armed Forces.This section eliminates a three-year limitation on loan deferment for certain members of the armed forces.

It allows deferments until 180 days after the borrowers are demobilized.

It also allows borrowers in the military to receive the benefit regardless of when the loan was originated.

Eligibility for this deferment remains limited to members serving on active duty or performing qualified National Guard duty during war and a national emergency.But the notable change that everyone is talking about today is the Income Based Repayment, a specific provision in the College Cost Reduction and Access Act, that hasn't come into effect — until days from now on July 1, 2009.Loan payments will be limited to 15 percent of a borrower's discretionary income or 15 percent of the amount that a borrower's (and spouse's if applicable) adjusted gross income exceeds 150 percent of the poverty line, divided by 12.

Unpaid interest and principal are capitalized and any outstanding loan balance is forgiven after 25 years of repayment.PLUS Loans made on behalf of a dependent student and Direct Consolidation Loans that contain PLUS loans are not eligible for the income-based repayment program.Holders of these loans must apply the borrower's payments first to interest, second to fees, and then toward the principal of the loan.Any interest due and not covered by the borrower shall be paid by the Secretary for up to three years except for periods that a borrower is in deferment due to economic hardship.The lender shall also capitalize the interest due when the borrower stops participating in the income-based repayment program, or begins making payments larger than what is specified under income-based repayment.Principal due and not paid under income-base repayment shall be deferred.Borrowers may remain in income-based repayment more than 10 years.When borrowers leave the program the maximum payment required on the loan shall not exceed the monthly amount based on a 10-year repayment period when the borrower first joined income-based repayment.

The time the borrower is permitted to repay the loan may exceed 10 years.The Department must repay or cancel any outstanding loan principal and interest for borrowers after 25 years of repayment.Borrowers currently repaying loans according to income-contingent repayment or income-sensitive repayment plans will have the choice to continue in their current plans or may participate in the program created by this bill.The Department must establish procedures to annually determine borrowers' eligibility for the program, including verification of a borrower's income and the amount of their loans.For more on this provision, and the rest of the Act, CLICK HEREHot Photos on LALATE NEWS:Erin AndrewsCrystal HarrisShannon TwinsIkki TwinsOther Hot Stories on LALATE NEWS:Eric Winter Roselyn Sanchez Wedding!
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