College Cost Reduction and Access Act was signed into law in 2007. it created a special income based repayment program for student loans to help the college graduates to make their loans manageable.
The Department of Education has gone one step further with a new law that will cap student loans, based on one's adjusted gross income. It is called Income Based Repayment Plan and will go into effect since July 1st of 2009. This new student loans repayment program is a new repayment plan for the major types of federal loans made to students. Under Income Based Repayment plan, "your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size," reads the information on the website of the U.S. Department of Education.
Income Based Repayment plan eligibility requirement is very simple. Any student may enter into this student loan repayment program if his or her federal student loan debt is high relative to your income and family size.
Call it a student loans bailout program, but it is good and encourages education. Here are two more benefits among others. If you repay your student loans under Income Based Repayment Plan for 25 years and still have a balance, the rest of your student loan is canceled. If you work in public service and have reduced loan payments through IBR, your remaining balance after ten years in a public service job could be canceled if you made loan payments for each month of those ten years.
High student loans have saddled the gradutes. They face a very difficult job market in this economy. Therefore programs like College Cost Reduction and Access Act and Income Based Repayment plan are just in time to bailout the student loans. At least this is a better type of bailout as we invest in knowledge and education, not in bonuses.
