Hi Heather,

The 9th June was a day when many students saw the light in the end of the tunnel and I was one of them.
The only thing I am afraid of (and I hope that you will tell me that I have nothing to be afraid of) is that in the future PAYE can be modified. Do you think that in the future PAYE can be cancelled or changed so that forgiven amount would become taxable or 10 percent cap would be increased? Can Congress revocate , repeal, modify or inhibit this beautiful Memorandum and the implementation of PAYE in a few years? I tried to find the answer to this question, this is the result of my research:  http://fas.org/sgp/crs/misc/RS20846.pdf

What about taxes on the amount forgiven after being 20 years in PAYE? As far as I know it, now they say that it will not be taxable. What if in the future, they will decide to make this amount fully taxable? What if in 20 years they change law and students will have to pay taxes on their forgiven loans under PAYE program? 
May be I don’t understand something and the possibility of PAYE changes is excluded?

My loan is big and in 20 years it will be about 3 times larger. The tax on that forgiven loan would be huge, almost the same as my loan now!
Should I get into this PAYE boat or there is a possibility that it can start sinking in the middle of the journey?

Also, is there a possibility that Parent Plus Loans will be included into PAYE option?

Thank you

I believe that borrowers currently in repayment will have access to forgiveness under the rules as they currently exist.  Although modifications are likely, no one has suggested pulling the rug out from under people with existing student loans.  It’s unclear whether there will be limitations or downsides to the planned expansion of PAYE.  We have to advocate and wait on that.

Now the tax thing is another matter altogether.  We are subject to the income tax rules in place when we file our returns each year.  I see no reason that congress couldn’t change the tax rules and make PSLF taxable (although it currently is not), or change the tax rules and make IBR and PAYE long-term forgiveness that is not tied to employment tax-free (although it is currently taxable).  Again, advocacy and engagement will be needed.

I’d love to see Parent PLUS loans in PAYE but I’ve heard nothing that sounds like it will be so far.