A new federal program starting in the fall offers hope and relief to millions of students and graduates that have major educational debts, in other words, you will be able to get student loan help. As of July 1, if you have federal loans, you can ask the government to place limit your payment amount to 15% of your income. This is a new income based program that is being offered to those with debt.

For the majority of borrowers, their monthly payment will be the 15% difference of the budget allowance, set by the government, and their current income. If your income falls within one and half times the poverty level, chances are you won’t have to pay anything.

If you are in a public service job, after 10 years of paying on your loans through the income based program, the rest of your debt will be erased. For those who are not in public service jobs but stay current on the income base payments for 25 years will have their debt forgiven as well.

In order to take advantage of the program, limit the amount of money you borrow to federal student loans. As with any loan, make sure to research the loans offered. If you are no longer in school, contact your lender to apply for the income based program. Make sure to apply for the correct program and not one that sounds the same. Some of the similar sounding programs are referred to as Income contingent repayment or income sensitive repayment.

If your loans are through a private lender, chances are they will not offer this program to you. So, before you apply for the program, locate a federal consolidation loan program to combine your loans. Once you qualify, keep track of the payments you make and any other necessary information. When the repayment period is over, you are going to have to prove that you followed the guidelines in order to have your loans forgiven.

There are some downsides to the program though. For instance, if you qualify but your payments don’t cover the interest portion of your loan, your debt will continue to increase until you reach the forgiveness period. There is a chance that you will have to pay taxes on the forgiven amount if you are not in a public service job. Also, if you have defaulted on your loans, the program will not lower your payments. If you have gone into default, you will not qualify for the program at all.

Types of loans not covered under the new program include parent, private, signature or alternative loans.

If your monthly student loan payments total less than 15% of your income, you will not qualify for the program.

Congress is being lobbied by several groups at this time to make changes to the loan program. Congress is considering modifying the law in regards to the program. If you cannot apply for the program at this time, there is a chance that in the future you will be able to.

Student loan refinancing may be the way out of debt. To refinance student loans, visit Pay-Off-Student-Loan.com