Smart Money Move: Student Loan Makeover

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Student Loans Getting a Bailout

Smart Money Move: Student Loan Makeover
by Claudine Zap

While the price of ignorance is high, the cost of college—not to mention graduate education—has become astronomical. A government initiative aims to change all that.

It's a simple concept called Income-Based Repayment, which reduces student loans so they aren't more than 15% of income. (Some people making very little income won't owe a cent.) After 25 years of repayment, debt is wiped out. If you're a teacher or work at a nonprofit, more good news: Your debt will be cleared after 10 years.

About 1 million people are expected to participate in the program. To see if you qualify, you can use the calculator here. U.S. News & World Report blog has some helpful tips for anyone who wants to apply.

News of the loan program sent searches soaring on the Web. Queries for "new student loan law" jumped to the head of the class with a whopping 8,800% increase. Other popular lookups included "consolidate federal student loans," "new law for student loans," "government help with student loans," and "department of education student loans."

See, now you can tell your parents it was a smart move to get that philosophy degree after all.