People who have a federal student loan can apply for the program from the Department of Education. It is
intended to give relief to former students with moderate incomes by sketchingstretching the payments out over a longer period. The program’s calculated monthly payment is based on the income. In addition, the program forgave balances after 25 years (10 years if the person chooses employment in the public service). The monthly payment calculation, called income-based repayment (IBR), determined the size of the loan and the person’s income. For some, 90 percent of the over one million people who have already enrolled in the IBR works out to less than 10 percent of their income. The program also caps the payments at 15 percent if a person’s income is over $16,000 per year and eliminates payments for people who earn more than $16,000.