Students who have been deterred from pursuing their dream career because it doesn’t pay well may have an incentive to choose otherwise.

The Income-Based Repayment Plan and the Public Service Loan Forgiveness Program will be available to students with loans under the Federal Direct Loan Program, such as subsidized or unsubsidized Stafford Loans and PLUS Loans for parents and graduate students.

The programs were designed for students who intend to pursue jobs with lower salaries, said Christine Lindstrom, the Public Interest Research Group’s higher education advocate.

“These loans are really good for people who want to go into careers such as teaching or social work,” Lindstrom said.

The programs are a part of the College Cost Reduction and Access Act of 2007, passed in October of the same year.

It is unclear when these programs will begin because there have been significant changes in aid legislation recently, said Craig Fennell, ASU’s director of student financial assistance, in an e-mail.

The Income-Based Repayment Plan places a cap on monthly payments based on a percentage of the graduate’s discretionary income, Lindstrom said.

This will depend on the size of the loan and the amount of money overall borrowed. Each year, the payment is recalculated. After 25 years, any remaining balance is forgiven.

The Public Service Loan Forgiveness Program forgives any remaining balance for those who devote 10 years of full-time employment in public service, Lindstrom said.

In order for the loan to be forgiven, the borrower must have made at least 120 payments. Public service jobs include military and government positions, police and fire fighters, and public education and health positions, as well as non-profit organizations positions.

Programs that target a social need are highly beneficial, said Dean of the College of Public Programs Debra Friedman.

With a disproportionate number of students in the College of Public Programs coming from nonprivileged backgrounds and a higher percentage of minority students than most other ASU colleges, Friedman said the forgiveness program will give them an opportunity to choose a career with a lower pay rate.

“It’s a great idea. It encourages students to forgo income as a primary motivation to study what they love,” Friedman said. “Some students really want a life of public service, but it’s difficult to make that decision on economically rational grounds.”

Samuel Richard, a nonprofit leadership and management junior, said rather than working for one specific organization, he wants to fight for the causes of the nonprofit sector as a whole.

Having a career in nonprofits is a way to affect change and he plans on taking advantage of the new plan, he said.

“Public service is a much-needed vocation in our society, but it isn’t all that appealing salarywise,” Richard said. “The Income Based Repayment Plan would help make that career path a more viable option.”

Reach the reporter at philip.haldiman@asu.edu.