Student loans

The President has refined his student loan forgiveness program. Students will pay 10% of the income above the poverty level for 20 years and then the rest is forgiven. If you work for the government or a non-profit the rest is forgiven after 10 years. A person working for the government making $40,000 per year will have payment so low that in ten years what is owed is more than the total loan because of negative amortization and the whole amount if forgiven. Many people will receive a form 1099 C from the government and the amount of debt cancelled will then be taxed to them as ordinary income in the year received. There are certain groups that will not have to pay tax on this income primarily those who choose to work for the government. Some consider this just one more way to divide the country. Public service loan forgiveness, teacher loan forgiveness, law school loan repayment assistance programs and the National Health Service Corps Loan Repayment Program are not taxable.