If your income is low and you have direct or guaranteed Federal student loans (including Stafford, PLUS or Consolidated loans), you may be eligible for reduced payments under the Income-Based Repayment program that went into effect on July 1, 2009. The IBR program reduces your payment to 15% of your income in excess of 150% of the poverty level (currently $16,245 for a single person and $21,855 for a married couple). For example: If you’re single and earn $20,000, the payments on your student loans will be capped at 10% of  $3,755 (your $20,000 income less 150% of poverty, or $16245) — $375.50. There are three catches that make it hard to realize any significant benefits from the IBR program:

· Your parents aren’t eligible for the program

· If you’re married, your spouse’s income must be included

And of course

· 150% of poverty isn’t very much money, especially in New York

But if you qualify, it may be very helpful in dealing with your student loans, which are virtually impossible to discharge in bankruptcy.

Also, if you have a direct student loan – guaranteed loans aren’t eligible – and you have a public service job, you may be eligible for loan forgiveness beginning ten years after October 1, 2007. Since student loans are normally repaid in ten years, this Public Service Loan Forgiveness program will not affect you unless your payments were reduced or deferred (including under the IBR program). To qualify, you must have ten years of full-time employment with a nonprofit, government, Americorps or Peace Corps or in a position that meets the Department of Education’s definition of “public service.”

Further information is available through IBR Info at http://www.ibrinfo.org/what.vp.html.