Thousands of college graduates across the country will be able to get some relief from their student loan bills under a new federal program that goes into effect Wednesday.

HOW IT WORKS

The Income Based Repayment program allows graduates to cap their monthly loan repayments at 15 percent of their total income. For those with low incomes or children, required repayments are less – and in some cases, nothing at all.

WHO'S ELIGIBLE

The program encompasses federal loans that account for about two-thirds of all student debt. The forgiveness is not available for loans made by banks or other loan companies, such as Citigroup or Sallie Mae.

PAYMENTS

A graduate earning $30,000 a year would be required to pay a maximum of $172 a month toward student loans. For someone earning $40,000 a year, the payment would rise to $297 a month. For someone earning $50,000, it would be $422 a month.

TIME LIMIT

Those who make their required minimum payments for 25 years will have any remaining loan balance written off. That can be reduced to 10 years for those working in public service jobs – including state or federal employees, nonprofit workers and public health workers.

A DOWNSIDE

One significant drawback is that some students may end up paying more over time. That's because by paying less each month, they will extend the life of their loan, adding to the total interest payments.

From wire reports