How to Get Out of Paying Your Student Loans — by Leaving the Country

Ditching America may solve some student loan problems, but it creates new ones.

expat student loans

How far would you go to get out of student loan debt? Beg? Borrow? Move to Berlin?

Although two of those options won’t get you very far, becoming an expat might work. Some people actually leave the U.S. to get out of paying student loans, said Mark Kantrowitz, publisher and vice president of strategy for Cappex, a college and scholarship information website.

The number of people who resort to fleeing the country — and their lender — is small, Kantrowitz said. “I typically hear from one or two a month,” he said. “In most cases, the borrowers want to repay their debts, but are faced with challenges in doing so.”

Student loan debt in the U.S. is a staggering $1.26 trillion, according to the Federal Reserve Bank of New York. Such debt could cause anyone to run for cover. But before you do something as drastic as leaving the country, here are some things you should know.

Plan on Leaving Forever

Moving to another country will get both government and private lenders off your back. But it is not a permanent solution unless you stay away. If you come back to the U.S., expect a lot of unwanted phone calls.

Save for Your Future

“There is no statute of limitations for federal student loans, meaning there is no time limit on collection,” said Adam S. Minsky, a lawyer who specializes in student loan debt. “There is typically a statute of limitations for private student loans, but this varies from state to state, and in some states the statute of limitations can essentially be ‘paused’ during the time that the borrower is living abroad.”

Related: How to Pay Off Student Loans After Graduation

Prepare to Cut Most Financial Ties to America

Simply leaving the country isn’t good enough to escape student loan debt: You have to cut most financial ties to America. If you have a federal loan, the government has sweeping powers to try to collect what you owe. “The federal government can garnish wages, offset federal and state income tax refunds, and offset Social Security retirement and disability benefits — all without a court order,” said Kantrowitz.

With private student loans, lenders usually have to sue you to pursue any involuntary repayment or settlement, Minsky said.


Your Family Members Might Also Take a Financial Hit

It’s not uncommon for parents or other family members to act as co-signers on student loans. But if you flee and stop making payments, these loved ones are fair game for lenders.

Save for Your Future

“Co-signers are just as legally responsible for student loans as the borrower,” said Minsky, So, if you stop paying, the lender is likely to pursue both you and whoever co-signed the loan, he said. And if your co-signer remains in the U.S. after you leave, the lender will almost certainly go after the co-signer, he said.

Kiss Your Credit Goodbye

Just because you leave the country doesn’t mean your lenders will write off the student loan. “The debt does not go away,” Minsky said.

Student loan lenders are unlikely to pursue borrowers who live abroad, Minsky said. However, they will report your lack of payments — and eventual default — to credit reporting agencies. “If a borrower defaults on student loans, it is reported to the three major credit reporting agencies, ruining [the borrower’s] credit,” said Kantrowitz.

Interest on the debt will keep accumulating, putting you further in debt and scarring your credit. In other words, don’t plan on getting that gold card or mortgage any time soon.

Read: The Ultimate Guide to Dealing With Student Loans You Can’t Afford

Save for Your Future

Making Payments While Abroad Can Be Tough

If you cut ties too cleanly, paying off a student loan can get messy. U.S. student loans must be paid in U.S. dollars and you cannot use ACH to transfer the money, Kantrowitz said.

“Imagine having to do an international wire transfer every month just to repay your student loans,” he said. “Lenders do not accept payments by credit card, except in rare circumstances, such as a one-time payment for a borrower who is about to go into default, or by PayPal.”

Your Passport, Citizenship and Freedom Are Safe

Both Kantrowitz and Minsky said that to the best of their knowledge, escaping student loans by fleeing the country does not put a person’s citizenship or passport at risk.

And, more good news: You don’t risk going to jail. “They will not be arrested upon return to the U.S. The U.S. has not had debtors’ prisons for over a century,” said Kantrowitz. However, both federal and private lenders can sue to get a court judgment against you. “This will enable them to seize assets and place levies on bank accounts,” said Kantrowitz.

Save for Your Future

The bottom line: Think long and hard before booking that one-way flight to Thailand. If you decide to return, it could be more expensive than you think.

Related: Bernie Sanders’ 7 Pieces of Advice for College Graduates

Alternative Ways to Get Out of Student Loan Debt

By now, you have probably figured out that fleeing to another country to get out of student loan debt is not the greatest solution. So here are a few other crazy things you might try.

Sell hot dogs. Don’t laugh: Hot dog vendors have limited overhead and pull in over $30,000 a year. In bustling hot-dog-loving locations like New York, they can earn six figures, according to TheRichest website. Your student loan debt will be gone before the ketchup stains set in.

Use your “public service” privileges. This one isn’t so crazy. If you are a veteran, teacher, firefighter or other public servant, there are some great programs to help you get relief from student loans. A great place to start is the Federal Student Aid website to see if you qualify.

Die. OK, admittedly, this one is a little drastic. But guess what? It works every single time. Plus, it’s a lot better than selling hot dogs. Just be careful you’re not leaving your debt to a family member — they won’t like that at all.

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About the Author

Terence Loose

Terence Loose is an award-winning freelance writer who writes about everything from travel and sport to fitness and finance. He is a Hawaii-based writer who has covered a broad range of topics during his 20-plus-year career, from finance and education to travel and celebrity. He is a former editor for both Movieline and COAST Magazines and his work has appeared in publications as diverse as COAST, Riviera and Movieline to the L.A. Times Magazine and Orange County Register.

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