The College Cost Reduction and Access Act is a complicated piece of legislation that, if you take advantage of it, can help you retire college and grad school debt early.
According to IBRinfo, "For most eligible borrowers, IBR loan payments will be less than 10 percent of their income - and even smaller for borrowers with low earnings. IBR will also forgive remaining debt, if any, after 25 years of qualifying payments."
Besides taking out the right kind of loan to start with, it's important to note that if you are married and file your taxes jointly with your spouse, your spouse's income counts when calculating your monthly payment. Married borrowers can have their IBR payment based on their income alone if they file their taxes separately from their spouse.
Retires the Federal direct or guaranteed (FFEL) student loan debt of public service professionals who've been making ten years of qualified payments on their loans. Guaranteed (FFEL) loans are only eligible for PSLF if they are consolidated or reconsolidated into Federal Direct.
Counting as public service includes full-time paid work for:
Read the fine print (PDF) of what counts as "qualified payments."
You can put both of these new programs to work for you — so you can make income-based payments for ten years, and then retire your debt, if you qualify for participation.
Also note that it's really all up to you to:
Many twists and turns exist in the path to understanding the new law as you try to take full advantage of these programs.
Below are some places to learn more:
Heather Jarvis is a leading expert on student loan repayment and loan forgiveness.
The National Consumer Law Center provides information about repayment options, avoiding and getting out of default, and dealing with collections agencies.
And coming each summer and fall to cities throughout the U.S., the Idealist.org Grad School Fairs.