Great News for Student Loan Debt - Stressed Out Borrowers

New Program Could Reduce Your Payment to Zero!

Students who have taken out federal student loans can now have some stress relief due to new government programs. Stress from Student loan debt can be overwhelming. When payments have been difficult to keep up, due to low income, unemployment, illness, there is hope, so don't despair. For the Student loan debtor, weary and broke, I have wonderful news.

Recently, congress passed the College Cost Reduction and Access Act in September 2007 and President Bush signed it into law on September 27. (It is now Public Law #110-84). For more information go here:

There are two little known student loan repayment options available and readers should be careful not to be confused. First, Income Contingent Repayment and the other, Income Based Repayment. The latter will be calculated to be the most helpful to most federal student loan debtors. There is a new repayment option called Income Based Repayment (IBR). Borrowers with FFEL or Direct Loans may qualify for Income Based Repayment.

For married debtors, the total Annual Gross Income of both you and your spouse will be used to calculate repayment amount. Your spouses written consent to disclose tax return information is required. Furthermore, if you submit alternate documentation of income, your spouse will have to as well. If your spouse has a loan, you can be repay your loans jointly. Payments will be based upon joint debt and income.

Individuals who work as a teacher, health care worker or government employee can have federal loans forgiven after 10 years.

One organization who worked on this program is the Project on Student Debt. The Project is managed by the Institute for College Access & Success. The new Income-Based Repayment program is modeled directly on a proposal developed by the Project and supported by a broad coalition of student, loan industry, and higher education groups.