Dateline Tivat Montenegro There is a student debt crisis looming above the US. Even successful people who are well into their 30s, 40s or 50s are still paying off their student loans. Students are restricted by student loans from taking on risks, trying out different careers, and following unconventional dreams. This is especially true for those without a partner or children. In order to avoid massive student debt, recent graduates often take any job that comes their way to reduce the amount of money they owe. Many young graduates look for ways to avoid student loan debt. Many college graduates are spreading the rumor of being able to eliminate their student debt by moving overseas. For those looking for a way to eliminate student loans, the best solution is to leave the country. Those who are tempted to leave the country for a place with a lower cost of life may do so to save money. Others may move to countries where they can easily earn more money. For those who are only interested in escaping their student loans, moving abroad may not be the best solution unless they never plan to return to the United States. The government can still sue you if you ever return to the United States. Federal student loans do not have a statute of limitation. Private lenders may have different rules than the government, but that doesn’t mean you are immune from collection agents. You will be contacted to make payments. Student loans are not easily resolved by moving abroad. If you want to have a successful financial future, you can’t avoid your responsibilities. However, moving abroad for debt relief isn’t realistic because you will still be liable. Although moving abroad can provide a variety of financial advantages, it is not a good idea to stop paying your student loans and then hope that the loan will be forgiven. This can lead to unpleasant consequences. This article will help dispel the myth surrounding student loans. It will also discuss how moving overseas can help pay off your debts faster.
The Myth: If you move abroad, you can avoid paying your student loans
Internet is full of myths about how you can “cancel” student loans by simply moving abroad and stopping your payments. This student loan forgiveness method, however, is not as effective in reality as it seems. Here’s why:
Don’t rely on student loan forgiveness
Students loans do not disappear despite what many people believe. Even if you declare bankruptcy, you’re still stuck with your student loans for the rest of your life. You won’t be able to escape them by simply moving abroad, no matter where you are. You’ll only be accumulating interest while you’re gone. You can defer or forbearance federal loans for whatever reason. But neglecting the loan will only lead to a greater burden. Private loans may not offer as many comfortable options. Private lenders don’t offer flexible repayment plans that are based on your income, and some won’t even allow you to defer.
Some presidential candidates, and others, have spoken of a nationwide forgiveness of student loans, but I wouldn’t put my hopes up. You’ll be in trouble if you move away hoping your student loan debts will disappear when you return.
Your financial future is at risk in the United States
You may find that you can no longer enjoy certain rights and benefits of being a US Citizen. IRS can take your debts straight out of your refunds – or even garnish your wages – to pay them. The government will take your money in any case. And the longer you are delinquent the more they’ll take.
You will be taken away.
Credit score suffers
You can expect to see your credit score drop if you don’t pay your loans. It could be a big hit, since your payment history is a large part of your score. Your lender may report you if you fail to make payments. This can have a long-lasting impact on your US credit rating. When you return to your home country, a low score or mark on your credit file will make it very difficult to apply for credit, get another loan, and/or obtain a mortgage.
Legal problems can arise from defaulting on a loan
If you fail to pay a loan within 270 days, without arranging a deferment, you will be in default. This is the same as failing to meet your loan contract’s terms. It will affect your credit score for many years and allow your lender to pursue legal action to recover the full amount of your loan, including additional penalties and collection costs. This defaulted debt will cost you a lot more money than the original amount you owed. You could not enjoy your trip abroad if you were constantly threatened with legal action.
Your family may inherit your debts
If your contract has cosigners, the lender will try to contact them if they cannot locate you. They will take on the burden of repaying your student loan debt if your contract includes the names of your family. Failing to pay back your student loan debt will therefore be transferred to the cosigner, which is unethical and selfish. You cannot begin your financial journey by transferring all of your debts to someone else.
New financial challenges in a new country
Settling in a new country can be a challenge, but it’s not the only one. It is necessary to be a resident in the country and to have lived there for a period of time before you can establish credit. You will have to use cash only for many years because you must cut off all financial ties to the US. You may not have the cash to invest in a business or buy a house in another country to obtain residency. In many countries, naturalization is difficult. Moving abroad won’t fix your financial problems. It can actually cause more.
Why Moving Abroad Still Makes Sense
Moving abroad in order to avoid the student loan collectors is not a wise idea. However, there are many reasons for moving abroad if you still have time. You can still become a global citizen despite your student debt. You don’t have to give up your financial future if you decide to return. To eliminate student loans, you must move abroad to a nation with low living costs and high earning potential. That will help you achieve financial stability and repay your student loan debt faster. Reduced tax burdens and costs of living, combined with increased income is the most effective way to increase your savings and help you pay off student loans.
If you move abroad correctly, moving overseas can be beneficial.
How to pay student loan debt from abroad
You’ll likely have to use your local banking account if you move abroad and wish to continue paying back your student debt. Your bank will charge you for any transactions made outside of the US. The fees may be substantial. If you’re planning to stay abroad for the long term, it is important to open a local bank to avoid withdrawal fees. You will be remitting money to the US often, so you’ll want to choose a large, international bank in your home country. You can then link your foreign account to your US bank and set up automatic payments. Your student loan payment will come out of your account.
You can choose to set up automatic transfers either monthly or quarterly. You can stay on top of your debt payments with automatic transfers and autopay.