I'm in my last year of fellowship and been doing the PSLF program on IBR payments for almost 5 years. I'm trying to decide if I should switch to REPAYE program. I've read many articles on REPAYE and when I finish my fellowship and make real money my monthly payments should go down since to my knowledge REPAYE calculates at only 10% of discretionary income. IBR which I'm currently on calculates at 15% of discretionary.
This article tell the difference but not sure if 100% accurate
https://www.usnews.com/education/blogs/student-loan-ranger/2015/11/04/a-side-by-side-comparison-of-3-income-based-repayment-plans
My concern with switching to REPAYE is it says in some articles that the Forgiven Loan Balance will be a taxable event. My forgiven balance could be close to 500K since it's currently 477K with 7.9% and my payment once finished with fellow will barely cover my interest expense. When I'm an attending based off of 250K income my IBR payment monthly will be about 2800 per month and with REPAYE about 1800 per month.
Does anyone know if the forgiven balance will be taxable by the IRS? Some articles say PSLF forgiven balance is not taxable and other say it is. Of course I realize the tax laws or programs may change but want to decide if I should switch into REPAYE or stay in IBR.
My biggest question is the tax consequences.
Thanks for everyone's time and input
This article tell the difference but not sure if 100% accurate
https://www.usnews.com/education/blogs/student-loan-ranger/2015/11/04/a-side-by-side-comparison-of-3-income-based-repayment-plans
My concern with switching to REPAYE is it says in some articles that the Forgiven Loan Balance will be a taxable event. My forgiven balance could be close to 500K since it's currently 477K with 7.9% and my payment once finished with fellow will barely cover my interest expense. When I'm an attending based off of 250K income my IBR payment monthly will be about 2800 per month and with REPAYE about 1800 per month.
Does anyone know if the forgiven balance will be taxable by the IRS? Some articles say PSLF forgiven balance is not taxable and other say it is. Of course I realize the tax laws or programs may change but want to decide if I should switch into REPAYE or stay in IBR.
My biggest question is the tax consequences.
Thanks for everyone's time and input
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