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Repayment and Debt Relief

Federal Student Loan Forgiveness Law: College Cost Reduction and Access Act (CCRA)

The CCRAA has many implications for public service in the United States and will enable many more graduates to pursue public-interest jobs without regard for debt, for many years one of the major obstacles for public-interest minded lawyers. Learn more.

Education Debt Relief

Many students choose to serve the public interest but soon find that high educational debt pushes them toward more fiscally lucrative careers. Learn how to start planning now to reduce the burden of your educational debt.

Repayment Options

There are two parts to CCRAA: Income-Based Repayment (IBR) and Loan Forgiveness.

The IBR section of the act allows those in repayment to pay back their federal loans based on income, rather than on the amount borrowed.

Annual Gross Income                        Maximum Monthly Payments 
(Assumes a family size of one.)        under IBR (2010)

   $30,000                                                $172

   $40,000                                                $297

   $50,000                                                $422

   $60,000                                                $547

   $70,000                                                $672

   $80,000                                                $797

   $90,000                                                $922

 $100,000                                                $1,005

The second part of the act, the forgiveness portion, allows forgiveness of certain federal loans after 120 months of payments while employed full-time in public service employment and making qualifying loan payments on Federal Direct Loans. If the individual is not employed in a public-service job full time for less than 120 months, the loan could revert to the original monthly payment with a 10-year amortization. As a back-end loan forgiveness program, the public-service loan forgiveness is an all-or-nothing benefit. If a borrower stops working full time in a public-service job, even with just a few of the 120 payments left, they get no forgiveness.

The public-service loan forgiveness option's main impact is to remove debt as a disincentive to pursuing a career in public service. Most borrowers will still earn less in a public-service job than in the private sector, despite the forgiveness. But previously borrowers were precluded from long-term employment in public service jobs because the debt-to-income ratios were unaffordable.

For those not employed in public-service jobs, forgiveness of the outstanding principal and interest of federal loans occurs after 25 years.

Loan Repayment Assistance Programs (LRAPs)

LRAPs provide loan repayment or forgiveness, lower interest rates on loans, or postponed payment of law school loans to graduates entering specific types of employment, usually law-related public interest jobs.

All LRAPs are not the same.  When visiting a law school to make your final decision on attendance be sure you understand your particular law schools program.  For example, some schools include spouse income and other do not, or some schools no longer allow you forgiveness once you cross a particular pay increase often only several years out. 

List of LRAP Programs

Created and administered by bar associations, bar foundations, independent nonprofit organizations and state education administrations, 17 states offer loan repayment assistance programs.


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