College Cost Reduction and Access Act - It's Almost Here!

College costs are outrageous, especially during a time when we can’t even make our house payments, let alone a $25,000 tuition bill. The costs at my college, ASU, were literally ridiculous, sending me into debt for probably the next 10 to 50 years!

So, while we’re struggling to work our way through school in a part-time job that frustrates us and pays minimum wage only to head home at nights and hit the books to keep our grades at acceptable levels, our school presidents are discussing how they can add new buildings and labs, which will in turn knock out some of the parking areas, which will drive prices up for parking as well as for tuition to pay for the new buildings that will only serve research professors who teach one class a week. (Taking a breath now).

And then we’ll graduate with a degree in something that we probably shouldn’t have pursued, only to be promoted to a full-time manager at our minimum wage job and stuck paying monthly bills for student loans for a degree that is getting us nowhere. But, I’m not bitter about the overpriced tuition, the books that cost $200 when you buy them but cost the school $50, and will get a buy-back value of $5 if you’re lucky. (Taking another breath).

Here’s the deal, though:

As part of the College Cost Reduction and Access Act signed into law last September, a new repayment plan will be available to grads on July 1 that will make it easier for them to afford their federal loans by basing monthly payments on their income as opposed to their outstanding federal loan balance. Also starting next month, those who decide to consolidate their variable-rate Stafford and Plus loans will be able to do so at a rate of as low as 2% -- a historic low. – SmartMoney.com

This plan was signed into law by President Bush in order to help students, and parents, pay back student loans based on their income. It’s a great idea, and one that will take effect very soon and help out millions of families. It is ironic that it’s just happening to take effect during a recession when so many people are in need of so much help. College costs are continuing to rise through the roof, and it’s an ironic twist of fate that this bill would take effect during the midst of our troubles.

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. –LALate.com

While we still will struggle with the cost of college, and our wonderful college presidents (not naming any names) continue to raise tuition on us, the College Cost Reduction and Access Act is some much needed relief.