New Rules Kick In 7/1/09
The Income Base Repayment program allows graduates to pay no more than 15% of their income toward monthly loan payments.

Starting July 1st, 2009, students with moderate to low incomes will be required to pay less than 15%, or nothing at all initially. It doesn’t mean the loans don’t have to be paid, but it reduces the monthly amount due.

Anyone who makes the required minimum payments for the 25-year loan may have the remaining balance written off. This provision can also be reduced to 10 years for individuals working in public-service jobs, including state and federal employees, nonprofit workers and public health employees

Just remember, this program may extend the life of your loan. It’s wiser to pay off your loans now if you can, rather than delay. Delaying the loan can increase interest paid.

Who Doesn’t Qualify
Private loans taken out by students, or federal loans taken out by parents do not qualify for this program. And people already in default of their loans do not qualify.

To Apply
Contact your lender who holds the student loan, and see if you qualify.