There’s a student loan crisis in full swing, and it doesn’t seem to be slowing down. With college costs continuing to rise, students are finding themselves with no choice but to take on significant amounts of debt for the ability to get an education. According to recent data, about 40 million Americans are carrying student debt totaling $1.2 trillion. Not only that, but it takes the average graduate with a bachelor’s degree about 21 years to pay off college debt.
If you’re among the many carrying student debt, that’s a long time to have a nagging balance hanging over your head. Even if you’re looking at just a 10-year repayment plan, that’s still many years of making loan payments. It’s for this reason that some debt-bearing graduates have been seeking an interesting way out: fleeing the country.
A large number of college graduates are currently living abroad in order to escape their student debt. Since it’s difficult for US lenders to come after borrowers residing outside the country, those who move to foreign soil to skip out on their debt may be onto something. All they have to do, in theory, is set up residence in another country to eliminate thousands upon thousands of dollars in principal and interest payments.
In practice, however, this tactic doesn’t work as well. Establishing residency in a foreign country is easier said than done. To do so, you need to meet certain income requirements, which means you need a real job that pays above a certain threshold depending on where you wish to live. Plus, you need to commit to living abroad indefinitely in order to truly abandon those student loans. If, after a few years abroad, you decide that you want to return home to the US, your lenders may then be able to come after you for that remaining loan balance. Worse yet, if you fail to make payments before moving abroad and ruin your credit score in the process, you could face major trouble when you move back home.
Unless you’re really willing to live in exile for the long haul, moving to a foreign country to escape your student loans probably isn’t going to work. A better bet is finding ways to repay your debt quickly to avoid racking up those huge interest charges that can haunt you for years. You can also look into student loan forgiveness programs, which apply to certain loan types and professions. If, for example, you work as a teacher in an underserved school district or are a government or public service employee, you may become eligible to have a portion of your loans forgiven.
If your loans stem from private lenders, you probably have fewer options, as most private loans aren’t eligible for forgiveness. If that’s the case, you can try finding a second job or looking into your refinancing options to make those payments more manageable. No matter what you do, think long and hard about the consequences of packing your bags and moving to another country. There are costs and ramifications of leaving the US on a long-term basis, and the last thing you want to do is exchange one set of financial troubles for another.