Borrowers jet to dodge student debt
With the national student debt now at $1.3 trillion, and thousands of borrowers in default, some borrowers are going to great lengths to avoid paying back their debt–including moving to a whole other country.
Hiding from student debt collectors abroad
An interesting new article from VICE takes a look at the many Americans who have moved abroad in order to hide from student debt collectors and avoid paying back their loans.
According to the article, if you’re living abroad, working for a foreign company, not paying US taxes, and not collecting social security, then student loan companies can’t come after you or your money, and the government will not chase you down.
Borrowers who move abroad will only be in danger of being caught if they begin to work for a US-based company, Joshua R. I. Cohen of The Student Loan Lawyer says.
That’s because “the federal government doesn’t have really strong tools for collecting debt from people who move overseas,” according to student loan expert Mark Kantrowitz.
The article goes on to interview several borrowers who have adopted this strategy and moved abroad. Unfortunately, they’re not completely off the hook for their student debt.
Student debt doesn’t disappear
According to the article, if a borrower’s family co-signed their student loan and remains in America, they’ll still be on the hook to pay back the borrower’s student debt even if they move abroad.
And if borrowers ever decide to return to the US, they’ll still have to pay back all that debt–including any interest that’s accrued while they were living abroad.
So moving abroad is far from a silver bullet for most borrowers’ student debt woes. As Cohen puts it, all borrowers who are adopting this strategy are doing is “putting off what could happen if they come back to the US.”
We definitely don’t recommend borrowers stop paying their loans if they move overseas, as borrowers who return to the U.S. will face dire consequences, including a significantly lowered credit score, and their parents may be forced to make payments on the loans to avoid doing the same.
Lower your student debt the right way
The best way to avoid taking extreme measures when paying off your debt is reduce your college costs and avoid taking out a large amount of student loans in the first place.
And if you need loans to pay for college, be sure to find one with a low interest rate.
If you’re already struggling with student debt, there’s no point in hiding–the longer you wait to repay it, the more your debt will continue to pile up.
We can also help you get on the best repayment plan for your situation to make it easier to afford your monthly payments and avoid defaulting on your loans.
Even if you’re already behind on your payments, it’s still possible to get out of student loan default and get back on track. Student loan consolidation can also be a good option to lower your payments and interest rates.
If you’d like to learn how we can help you manage your student loan repayment, call Rick and Andy at 888-234-3907 or contact us for a free consultation.