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Lower Payments

The biggest change is a new repayment option called income-based repayment. It will cap your monthly federal student loan payment based on income and family size. If you make less than one and a half times the federal poverty level for your family size, your payment will be zero (check the U.S. Department of Health and Human Services' website at HHS.gov to see if you qualify). Anything more will be regarded as discretionary income, and your monthly student loan payment will be 15 percent of that amount.

If the math sounds complicated, here's a good rule of thumb from Edie Irons, communications director of the Project on Student Debt: "If you owe more in student loans than you make in a year, you very likely qualify. It's designed for people with a high debt burden in relation to their income. So the less income you have, the less you have to owe in student loans to qualify."

Anyone with a federal student loan is eligible, no matter who your lender is or when you got your loan. To learn about your options, contact your lender.

If it seems like you'll be repaying forever, you won't. After 25 years, any remaining balance is forgiven. That means that, although you'll accrue more interest by stretching your repayment period with lower monthly payments, it may not matter. 

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