New program offers break on student loans

There's some good news for college graduates who have big student loans to pay off. You may be able to get some help from Uncle Sam.

This could be a big stress-reducer for many people. The U.S. Department of Education launched its new repayment plan on Wednesday. It lets college graduates reduce their student loan based on their income.

Many graduates accumulate a staggering amount debt in order to get that diploma. Some student borrowers owe $80,000 to $100,000 or more when they leave school. And with the current economy, it may be hard for some to repay their student loans.

The "income-based repayment program" is available to those who took out a federal loan or federal consolidation loan. If you qualify for the program, you can get your monthly payments dramatically lowered.

Make timely payments for 25 years and the balance of the loan is forgiven.

If you go into public service - that is, work for a government agency, a nonprofit agency or join AmeriCorps - your debt will be forgiven in ten years.

The new program is not limited to low-income individuals. Generally, you qualify for the program if your federal student-loan debt is equal to or greater than your annual income.

If you are accepted into the program, you will be required to document your income and your family size each year to set your new payment amount.

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