Depending on how much (or little) you earn, maybe.

The news is even more promising for people working in public service jobs—all levels of government work, teachers in public schools and universities, employees of public hospitals, and anyone working for a 501(c)(3) nonprofit would all qualify. Anyone working in a qualifying job who borrowed from the Direct Loan Program is eligible for loan forgiveness after 10 years, down from 25.

To qualify for forgiveness, borrowers who work in a public-interest position must either have an existing Direct Loan or consolidate a federal loan with a private lender into the Direct Loan Program and make 120 payments after Oct. 1, 2007. The payments do not have to be consecutive, can be made while at different eligible positions, and must be made on the income-based or standard repayment plans.

At this point, the burden is on borrowers to document where they were working during their repayment period. The Department of Education is planning to develop a more definitive system to confirm eligibility, but right now borrowers should keep pay stubs and tax documents that verify their work history.

IBR and public-loan forgiveness won't be the best options for every borrower. Some borrowers, if able to make higher monthly payments, would be best served by sticking with a traditional payment plan to avoid accruing years of additional interest. Graduates who financed their education with private loans are ineligible entirely.

But for MBA grads who borrowed $150,000 planning to be an investment banker but ended up in government service, IBR will result in payments they can afford on their civil servant salary.

Thanks to Edie Irons at the Project on Student Debt and Justin Draeger at the National Association of Student Financial Aid Administrators.