September 11, 2007

Fair Loan Payments in the College Cost Reduction Act

Posted in Legislation Affecting Students at 7:52 AM by Joe From Boston

The Project on Student Debt has a comprehensive description on H.R. 2669, also known as the College Cost Reduction Act. It has a basic outline and also an FAQ.

Here’s what they say:

  • Cap student loan payments to a reasonable percentage of income. (The lower the income, the lower the cap). See details in the Q&A below.
  • Recognize borrowers’ family responsibilities. The bill adjusts the maximum required payment to account for family size. (The bigger the family, the lower the cap.) See details in the Q&A below.
  • Limit buildup of interest. When capped payments are insufficient to cover interest charges, the program covers the interest on subsidized loans for up to three years.
  • Ensure there is light at the end of the tunnel. Cancels remaining balances (if any) after 25 years (generally this would be accrued interest).
  • Be widely available. The benefits are available in both major federal loan programs.

To read the FAQ, visit the Project for Student Debt.