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On September 27, 2007, President Bush signed the College Cost Reduction and Access Act of 2007 (“CCRAA”) into law. In addition to other amendments to the Higher Education Act of 1965, the CCRAA created two new federal programs: a new Public Service Loan Forgiveness program and a new Income-Based Repayment plan (IBR) for the repayment of federal loans.
The Public Service Loan Forgiveness Program offers forgiveness for outstanding Federal Direct loans for those individuals who make 120 qualifying payments after October 1, 2007, while working full-time in a “public service job” as defined in the Act. The new Income-Based Repayment plan helps to make repaying education loans more affordable for low-income borrowers, such as an AmeriCorps member living on a stipend. IBR will become available in July, 2009.
On October 23, 2008, the Department of Education published a final rule that details the implementation of the Act. It is important to note that the final rule recognizes full time AmeriCorps service as equivalent to a public service job.
The Corporation has developed a set of Frequently Asked Questions (FAQs - PDF) based on the Department of Education’s final rule. These FAQs are designed to answer a variety of basic questions that AmeriCorps members/alumni might have based upon their individual loan status. If you have additional questions on the impact of the Public Service Loan Forgiveness Program and/or the Income-Based Repayment plan for AmeriCorps members or alumni, please send your questions to: AmeriCorpsloanforgiveness@cns.gov.
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