[dml2135]

We already have what you describe, it's called Income Driven Repayment. Your monthly payment is set to a certain percentage of your income, and after 20-25 years, any remaining balance is forgiven. The only difference being that forgiveness is paid for by the government, not the school.

The program is frankly a mess, with a ton of byzantine rules around eligibility and how the monthly payment is calculated. I work for a company that deals with this and have partial ownership of the code that has to implement these rules, and it's frankly a nightmare.

Furthermore I have serious doubts about the value of the program. It's really only good as a stop-gap measure to avoid defaulting on your loans in the immediate future. Going for the 20-year forgiveness seems unwise to me, since you are experiencing negative amortization for that time and your loan balance will be increasing. So most of the amount forgiven will be accrued interest, which will then be taxed. In most situations it would probably be better to focus on increasing your income and just paying the loans off.