College Cost Reduction and Access Act (CCRAA)
The College Cost Reduction and Access Act (HR 2669 or CCRAA) was signed into law on September 27, 2007. The CCRAA reauthorizes a portion of the Higher Education Act, and is also a reconciliation bill, applying $21 billion in savings from cuts to lender subsidies to higher education initiatives. In addition to the College Access Challenge Grants, the CCRAA also includes a new loan forgiveness program for certain Direct Loan borrowers who are public service employees.
US Department of Education CCRAA Web page
Student Loans
Interest rate reductions chart and explanation
The CCRAA lowers
interest rates on subsidized Stafford loans made to undergraduate students under the Federal Family Education Loan (FFEL) Program. These changes do not apply to unsubsidized Stafford loans or any other loans made to these or any other borrowers.
US Department of Education Competitive Loan Auction Pilot Program for PLUS Loans
The US Department of Education issued a notice on March 3, 2009, to auction the right to originate PLUS loans to new parent borrowers under the FFEL program. Due to a lack of submissions of qualified financial institutions in every state, the Department of Education cancelled the auctions.
Veterans Issues
Military Service Deferments
The CCRAA amends prior military service deferment for borrowers in the FFEL, Direct Loan and Federal Perkins Loan programs for individuals called to active duty during a war, national emergency, or other military operation. Included is the elimination of any maximum time limit for deferment (borrowers are eligible for entire duration of active duty); deferment eligibility of all title IV loans in repayment on October 1, 2007; and 180 day extended deferment period after return from active duty.
Active Duty Student Loan Deferment
The Active Duty Student Deferment is available to students called into active duty participating in the FFEL, Direct Loan, and Federal Perkins Loan programs. This deferment allows for a 13-month deferment of payment following completion of active duty military service for students enrolled in a postsecondary institution a the time of, or within six months prior to, their activation. Unlike the Military Service Deferment, borrowers receiving the Active Duty Student Deferment are not required to have been activated during a war or national emergency, however, it is possible to qualify for both deferments simultaneously.
Economic Hardship and Loan Repayment
Income-Based Repayment
The CCRAA establishes a new Income-based Repayment (IBR) plan for borrowers in the FFEL and Direct Loan programs facing partial financial hardship. The IBR repayment plan limits a borrower's monthly loan payments to 15 percent of their adjusted gross income. After 25 years of repayment, a borrower electing to participate in the IBR plan at any time could qualify for complete loan forgiveness.
Loan Forgiveness for Public Service Employees (NACAC Brief)
Under the CCRAA, high school counselors, as public service employees are eligible for forgiveness of the remaining balance and accrued interest after 120 payments. Both, school counselors and college admission officers are eligible for complete loan forgiveness after 120 monthy payments. Details and requirements are available online.
Economic Hardship
A FFEL, Direct Loan, or Federal Perkins borrower may qualify for an economic hardship deferment for a maximum of three years if the borrower is facing economic hardship according to federal poverty standards. The CCRAA changes the qualifying poverty line standard from 100 percent for for a family of 2 to 150 percent of the poverty line tied to a borrower's family size.
Student Aid
Pell Grant Increase
The CCRAA establishes mandatory funding increases for Pell Grants through 2017 in addition to discretionary funding amounts provided through appropriations.
Elimination of tuition sensitivity
Under the CCRAA, an HEA provision that scaled down Pell Grant award amounts to students at low-cost institutions (e.g. community colleges) has been eliminated.
TEACH Grants
The CCRAA introduces TEACH Grant Program, which provides up to $4,000 a year to assist students planning on becoming teachers or teachers who are obtaining graduate degrees. To qualify for a TEACH Grant, a candidate must meet certain academic standards as specified by the Department of Education. In exchange for the grant, recipients must agree to serve as a full-time teacher at a public or private low-income school district and within certain fields for at least four years within eight years of completing their course of study.
Income Protection Allowance (IPA)
After the 2012-13 award year, the CCRAA authorizes the dollar amount increase of student IPA's by a percentage equal to the Consumer Price Index (CPI). This amount is determined through
need analysis from information provided on the FAFSA. The CCRAA changes apply to dependent students and independent students with and without dependents of their own.
Simplified Needs Testing and Zero EFC
Beginning with the 2009-10 award year, if one of the parents of an dependent student or if the independent student and/or his or her spouse is a dislocated worker, the student qualifies for SNT or automatic zero expected family contribution (EFC). In addition, the maximum qualifying income for an automatic zero EFC calculation is raised from $20,000 to $30,000 and requires updates to this amount based on increases in the Consumer Price Index.
College Access Challenge Grants
The College Access Challenge Grants (CACG) are awarded to states to provide professional development for school counselors and college admission officers, as well as college preparatory information for students and families. See NACAC's CACG page for more information.