It is just so hard to sit around and pay the “monthly minimum payment” requirement knowing that my loans are multiplying and when I’m 55 years old I will have a huge debt to settle with the IRS (like $80,000).  How does that work??  Do we have any hope that this “smoke and mirror” of PAYE debt relief will actually be relief anytime?  How can anyone be ok with signing up for this?  The reason we are ok with signing up for this, is because we have no choice.  I may have a choice (to refinance and pay even more money every month and risk defaulting), the lesser of two evils, but first I want to know if Heather or anyone has any thoughts/knowledge/insight on the 2015 budget proposal that supposedly has a provision to get rid of the taxable income issue when these PAYE debts are discharged?  This is our only hope, or as I see it, we are still getting royally screwed (7.0% interest rate from a govt. loan!!)

If I could just pay the amount I am supposed to pay based on my income, and I could 100% guarantee that no matter how much bigger my loans got that they would go away in 20 years, now that would be relief.  Thoughts?  Hopes?

Hi Meghan,

I feel your pain.

My husband and I are currently loosing sleep over this issue too, as I am sure so many of us are. I have not heard a word about the 2015 budget, but I am hoping and praying that something will be done about this terrible situation we are in.

I have been trying to interpret the IRS code, Section 108(f) which describes the conditions where your forgiven loan amount is not considered taxable. I feel like I am trying to interpret some sort of cryptic ancient text! It says some thing like, “if you work in certain professions…then maybe…if the mood is right and venus is squaring your moon that month, then…maybe…”

I really wish it would at least be clear if in 25 years I need to come up with millions of dollars to pay the IRS.

Please keep me posted if you hear anything about this, and I will do the same!