Bob Child, AP
Dr. Paul-Henry Zottola poses in his office in Rocky Hill, Conn., Thursday, Aug. 2, 2007 in one of his dental chairs. Zottola says that between student loans and the costs of starting his practice, to say nothing of daily living, he is faced with a very large debt. The U.S. Department of Education announced a new way for students to pay off student loan on Dec. 21.

Students have a new way to repay student loans after a “pay as you earn” option was launched by the U.S. Department of Education on Dec. 21, according to an article by The Capital-Journal.

The policy caps monthly payments at 10 percent of the borrower’s discretionary income and clears remaining balance after 20 years, but not everyone is able to use the cap.

Those who borrowed loans before Oct. 1, 2007 don't qualify. Federal direct loans are funded, but loans like federal family education are not.

Some don’t think the cap is a good idea, The Capital-Journal reports, because lengthening loans includes increasing interest. Loan forgiveness could also lessen pressure on schools to keep tuition reasonable, and increase students' willingness to take on debt.

The purpose, the Department of Education said, is to make defaulting on loans less likely. Currently about 13 percent of student loan borrowers default within three years.

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