Individuals who are unemployed, have low-income jobs, or have very large student loan payments may qualify for this new repayment plan. This plan says that individuals whose income is 150% less than that of the poverty level for their family size would not need to make any student loan payments. If they make more than the 150% of the poverty level, then their student loan payments are only 15% of the amount of income that exceeds that threshold.

This repayment plan is available for subsidized and unsubsidized loans, Graduate PLUS loans, and certain consolidated Stafford and Graduate PLUS loans. A Grad PLUS loan is a low, fixed interest rate student loan guaranteed by the U.S. Government. The loans can be new or old, and they can be for any type of education (undergrad, graduate, etc.).

For 2009, 150% of the poverty level for a single person is $16,245. So, if you make less than that amount you would qualify for zero payments. After 25 years, your loan is considered paid off. However, there is no income limit for this repayment program. If anyone owes more than they earn in year they can qualify.

If you work in public service and have qualified for this repayment plan, your remaining balance after ten years is cancelled if you made payments every month for those ten years. For purposes of the Public Service Loan Forgiveness Program, the term "public service organization" means a job such as Emergency management, Military Service, Public Safety, Law Enforcement, Public Education, Public Library Services, etc.

The only stipulation is that you have direct loans and you make the 120 monthly payments under the Direct Loan Program. These direct loans can be a:

- Federal Direct Stafford/Ford Loans (Direct Subsidized Loans)
- Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans)
- Federal Direct PLUS Loans (Direct PLUS Loans) - for parents and graduate or professional students
- Federal Direct Consolidation Loans (Direct Consolidation Loans)

If you have FFEL (Federal Family Education Loan) then you can consolidate them into the Direct Loan Program to take advantage of this Public Service Loan forgiveness. If your monthly payment does not cover the monthly interest that is accruing on your loan, then the government will pay your unpaid interest for up to three consecutive years after you first enter this repayment program on a Direct Loan or FFEL.