Help for those drowing with student loans.

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Is your student loan killing you?
New program helps manage student loan debt Payments are adjusted for income, some balances could be forgiven NEW YORK - Repaying a student loan could soon be a little less painful.

Starting this week, anyone with a federal student loan can apply for a program that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years.

Eligibility for income-based repayment (IBR) is determined by a person's income and loan size. A calculator at www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday.

"It's a way to borrow for college without going to the poor house," said Lauren Asher, president of the Institute for College Access & Success, a California-based nonprofit that runs the Project on Student Debt.

Monthly payments would amount to less than 10 percent of income for most of the estimated 1 million people expected to enroll, experts say. Payments would never exceed 15 percent of any income above about $16,000 a year (or 150 percent of the poverty level).

Those who earn less than $16,000 would not have to make any monthly payments.

The new payment option is intended to provide relief for those who earn modest salaries and struggle under the weight of student loans for years on end. By stretching repayment over a longer period, monthly payments are kept at a reasonable portion of income, though most people would not see any savings on the total cost of the loan.

Deciding which student loan is right for you can be confusing because of the variety of loans available. Here's a rundown of the most common types.

STAFFORD: This is the primary federal loan for students. Students can get the loans either direct from the government (through "direct lending schools") or from private lenders such as banks and credit unions (through a program called the Federal Family Loan Program). However, President Barack Obama has proposed eliminating private lenders from the federal loan program and many student lenders are no longer in the business.

SUBSIDIZED VERSUS UNSUBSIDIZED: Students who demonstrate financial need can get subsidized Stafford loans, in which the government pays the interest on the loans while they're in school. About two-thirds of subsidized Stafford loans are given to students with income under $50,000. Otherwise, Stafford loans accrue interest while students are in school as with most other loans.

PERKINS: This is a federal loan available to undergraduate and graduate students with exceptional financial need. The school acts as the lender, tapping a pool of funds provided by the federal government. The interest rate is lower than with Stafford loans and the government pays the interest while the student is in school. There is no origination or default fee, as with Stafford loans.

PLUS: Parents can take out federal loans to supplement children's aid packages. As with Stafford loans, PLUS loans can be either direct loans or negotiated through a private lender. PLUS loans are the responsibility of the parent, not the student. Graduate and professional students can also take out PLUS loans to pay for their own education. Repayment on Parent PLUS loans usually starts 60 days after the funds are dispersed although an option now allows for deferment while the child is in school. Graduate students can defer repayment while in school, but there is no six-month grace period upon graduation.

PRIVATE: Loans from banks, credit unions and other private lenders typically come with significantly higher interest rates than federal loans. Eligibility and loan terms depend on your credit score. The provisions for deferment and rehabilitation are typically not as forgiving as with federal