News: Welcome to the Beta launch of the Student Loan Debt Forum on The College Investor.

  • August 15, 2018, 01:50:35 PM

Login with username, password and session length


Author Topic: PAYE after 20 years  (Read 577 times)

jmichman

  • Newbie
  • *
  • Posts: 1
    • View Profile
PAYE after 20 years
« on: January 10, 2018, 07:12:59 PM »
I'm a 45 year old Doctoral candidate that is just beginning to pay back loans.  My current payment and my anticipated future payments will likely all be interest only payments.  I want to know if debt cancellation will be automatic or if I can elect to continue the program after 20 years.  It may end up that 10% of my income from 65-Death will be much cheaper than the taxes I will need to pay at 65 should the debt be canceled.  I already own a home and have a 401k so it's unlikely I will be insolvent.

TheCollegeInvestor

  • Founder
  • Administrator
  • Sr. Member
  • *****
  • Posts: 417
    • View Profile
    • The College Investor
Re: PAYE after 20 years
« Reply #1 on: January 10, 2018, 08:41:43 PM »
Negative, it's automatic. Your payment plan ends and any remaining balance is discharged and you're issued a 1099-C for cancellation of debt.

You're assuming the laws don't change by then - which could happen. You also have to note that the higher taxes you'll pay on your increased income due to the debt cancellation will always be less than your student loan debt. So, even if you setup a payment plan with the IRS when the event occurs, you'll be better off.