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.

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.

“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.

“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

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.

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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  • Monaco? Really?


  • G0OS3

    This article is retarded, the author must be on crack.

    • Dude

      Lol, my thoughts exactly.

  • t-dawwg

    derr…I wish I could get a bartending job. I’ve tried.

  • Loois

    Mediocre article; I can tell the author never had any student loans.
    Try your luck elsewhere and come back soon if it doesn’t work out.
    It’s no like the tax payer’s money is being used fairly anyway (IRS Scandal 2013)

  • Math

    First, I’m sick of people complaining about their tax dollars. Me paying back my private student loans, which is what burdens and kills most people, has NOTHING to do with your taxes.

    So I’m expected to feel “guilty” for wanting to skip out on my 70k loan, which ballooned up to 100k… with various interest, some around %9.75, and %10.75… which Sallie Mae refuses to renegotiate on despite my paying every month… and I cant bankrupt away.

    I have private loans. I cant, and wont, afford to pay 1200 a month for 10 years, or 800 for 15 years… 600 of which is just interest!!! And get more than one job? I dont know about you, but my job expects us to work unpaid overtime on a regular basis… so you dont have time for another job. I’m also bound by a non-compete claus so I can even try and do side work legally.

    I’ll be paying until I’m 60, if I live that long since I wont be able to afford good healthcare, and then there may not even be social security for me to live on.

    I would have been better off trying to rob a bank. All the laws are there to keep my financially crippled, for my mistake of trying to go to school. So while I’d pay my taxes before I left, if I cant get my payments down to 300-500 interest AND principal, give me one good reason I should stay here and deal with that horrible debt?

    • Dr K

      Time to grow up and take responsibility for taking out private loans. Whine all you want; you owe the money. If you maxed out your credit card at 29%, would you also not pay it?

      • Engineer Paul

        What is more responsible paying a student loan, or not paying for health insurance and watching your family members die one by one. Also have your teeth get cavities and not go to the dentist, and not even bother going to the doctor any longer, but just take pain pills when in pain from being sick?

        IF people could earn an income that allows them to make all their payments, most people would not be looking for a way out. People look for a way out when it is either leave or kill themselves.

        I personally think of both each day, and quite frankly I get on my soapbox doing what I can each day to tell people not to go to college because it is not worth it. There are not enough jobs for the people looking right know, and basically the only shortage of workers there is here in the USA is ones that are willing to work for less than the Chinese laborers in China. At those kind of wages who would ever be able to pay a student loan?

        Also I would much rather take my own life than kill those that I love to satisfy any loan. I’m sure that I’m in the Majority on this one…

      • Derek Holland

        Well, I would try to pay that credit card, but if I couldn’t….then bankruptcy. Oh, yeah, student loans can’t be discharged in bankruptcy.

    • AMis Friend

      I’m with you, bro. I’m with you all the way. If you want to split – my and every rational person’s blessings to you – this was 2 years ago, I hope you’re long gone by now

  • expat abroad

    European banks/credit checks don’t access your American credit standing. Student loans? Yeah, right. The best way to go is to have dual citizenship.

  • AMis Friend

    the thing I find most wrong with this article is the assumption that it’s our legal & moral duty to pay these shitty loans, to the extreme of coming to severe personal harm. It is simple, folks: IT SHOULD BE FREE. EDUCATION SHOULD BE FREE. Period. Countries with lower GDP do it, why can’t this place? I say, anything people can do to activate their inalienable rights as human beings (such as procuring a FREE EDUCATION, even if it means getting loans and splitting) is fine in my book. Still would not even approximate 1/4 of the atrocities that the corporate capitalist pig fucks inflict on ppl every single day

  • Needlejuice

    “Clean and maintain cemeteries”