Hello there. I'm an American currently living in the U.K. and have about 100k worth of student loans via the US Government. I consolidated my loans a while ago and have a roughly $900 payment per month on the standard repayment plan.
When I started working in the U.K., I realised that there is a tax loophole called "Foreign Income Exclusion," which allows me to write off my entire UK salary because I'm not the US for longer than 30 days each year. According to the IRS, my gross annual income is "0".
About two years ago, I applied for an income-contingent repayment plan--which, because my income in the eyes of the IRS is zero, meant that my consolidated loan payment is also zero.
After 25 years on this plan, under the Obama administration anyway, any debt not paid is forgiven. I would still need to pay tax on the amount forgiven. I am close to getting my right to remain in the UK indefinitely, but do at some point plan to return to the US.
My takehome each month is about $3000--I could afford the payment but it would mean downgrading my lifestyle somewhat and I'm reluctant to do so.
My question is: am I better off not paying anything now if I plan to stay in the UK, even in the short term (3-5 years), or paying something each month? It seems to me that I would just be throwing money away. Thanks in advance for your feedback.
Submitted January 03, 2017 at 12:30PM by miketheantihero http://ift.tt/2hOHNp6
