Students and Grads, Listen Up: Student Loan Debt Relief Is on the Way

Students and Grads, Listen Up: Student Loan Debt Relief Is on the Way

Worried about how you will pay off student debt after graduation? Are your current student loan payments unaffordable? What if you can't get a decent paying job in this economy? If you have federal student loans, no matter when you took them out, a new program that begins in July 2009 could provide relief.

Income-Based Repayment (IBR) is an important new payment option for federal student loans. IBR can make loan repayment more affordable by capping monthly payments based on your income and family size. Any debt left after 25 years of payments will be forgiven. This program covers almost all federal loans made to undergraduate and graduate students, whether your lender is a private company like Sallie Mae or Citibank, or the federal government.

IBR is designed to help people with high debt burdens (more debt than they can afford to pay off in 10 years). For most eligible borrowers, IBR payments will be capped at less than 10% of income. For borrowers with very low incomes, IBR payments could be as low as $0 a month.

If you are currently working in public service or will be after graduating, another new program could forgive your remaining debt after just 10 years of IBR payments. Public Service Loan Forgiveness is available for full-time government and nonprofit workers with federal student loans in the Direct Loan program. Whatever your job, if you work for a federal, state, or local government – including public schools – or for a 501(c)(3) nonprofit organization, you may qualify.

For more information about how to qualify for IBR and Public Service Loan Forgiveness, check out Created by the nonprofit Project on Student Debt, the site includes consumer-friendly information and tools like a calculator to estimate your IBR payment amount, answers to frequently asked questions, and other important information about what you can do to make the most of these borrower benefits. You can also join the Project on Student Debt on Facebook for timely updates about IBR.

The Project on Student Debt is supported by The Pew Charitable Trusts, the William and Flora Hewlett Foundation, the Ford Foundation, the BayTree Fund, and individual donors. The Project on Student Debt is an initiative of the Institute for College Access & Success, an independent, nonprofit organization working to make higher education more available and affordable for people of all backgrounds. For more information see and

Pew is no longer active in this line of work, but for more information, visit the Project on Student Debt Web site or visit the The Project on Student Debt on