The devil is in the details (the last bullet point on your first link):
> You may have to pay taxes on any loan amount that is forgiven after 20 years.
Roughly: the more student loan payments are reduced now, the more the borrower will pay in federal income taxes later.
The unpaid portion of the loans will be accumulating at least some interest until forgiven. Forgiveness of that remaining balance would (under today's law) trigger a significant tax event for the borrower.
Like with every kind of income, getting the income and paying 30-40% tax on it is vastly better than not getting the income.
But yeah, that's a big chunk of money to have to come up with all at once in a given year.
I'm trying to learn more about this but am feeling overwhelmed. Is there a professional I could contact to help me? I went to the website suggested in the info sheet on PAYE to find out who "services" my student loans and it's a company I've never heard of.
In most circumstances, you'll end up paying less under this plan than under other payment plans contingent on income. In fact, if you have no income while you're starting your startup, you'll owe nothing. This is pretty much always a better option than getting a forbearance or doing one of the other payment options [1, 2], at least until you realize your millions.
The qualifying criteria are really the sticking point. Please post your questions, concerns, tax advice, etc., below. None of this is straightforward, and I'm sure I have as much to learn about this as the rest of you. ...
0. http://studentaid.ed.gov/repay-loans/understand/plans/pay-as...
1. Only recent borrowers qualify for this option. If you don't qualify, look into consolidating your loans through the Dept. of Education, then applying for the PAYE repayment plan on the consolidated loan.
2. The NYT has a good summary: http://www.nytimes.com/2013/01/01/opinion/relief-for-student...