Can’t Pay Your Debt? – Just Leave the Country!
The Daily Vidette, Illinois State University’s college newspaper, reports today that some students are fleeing the country to avoid mounting student loan debt. It’s an interesting story, but unfortunately, they do not provide any examples – Who are these students? Where are they going? Are they fugitives from justice or just, say, joining the Peace Corps to get deferments?
If any of my readers know anyone who has actually fled the country to avoid student loan debt, please comment below.
Categories: News
Daily Vidette, Illinois State University, leaving the country, student loans
Student Loan Stories 
I am planning on leaving the country solely because of student loans. I certainly have no criminal history. I have had 2 traffic tickets in 15 years.
I was a real estate attorney but my entire practice was completely decimated in the sub-prime implosion. I have lost everything including my enthusiasm for the practice of law. Unfortunately, there is no federal bailout for me and no second chances within the bankruptcy code. I have now moved back home with my parents and am attending a community college studying IT/software development. I had to go back to school to keep my loans deferred (although I have so many creditors/collectors calling already I am not sure what difference a few more would make) I have over 200k in loans and about 60% of that is private. By the time I am out of school I won’t be surprised if another 25K is piled onto that. The payments were about $1100 per month before and will increase as time goes by due to the type of repayment plan I have.
There is almost no possibility that I will be able to keep myself out of default. Once I default I suspect the balance will jump to over 400k making it even less likely that I will be able to pay. Further, even if I actually could make the payments, doing so would assure that I have absolutely nothing to show for an entire career of working. Post-default, the repayment period will jump from the current 25 to 35 years or more. Much like homeowners who are underwater on their mortgage, for me the long-term cost of repayment of an inflated asset is greater than the long-term cost of default. Oddly, even the maximum amount of wage garnishment allowed under law in most states would be a decrease in my monthly payment. Ironically, education has not opened doors for me, but rather closed them.
Other jurisdictions have more liberal bankruptcy laws which will allow a discharge of student loans should the collectors ever catch up with you in your new country. Furthermore, other countries do not operate under the Experian/TransUnion/Equifax dictatorship and so a true fresh start is a real possibility.
The system is very broken. I also believe the five to 10 year default rates on student loans are much higher than the official numbers and are likely to increase if the economy slows down long term. Assumptions about the true value of higher education are already beginning to shift to reflect the practical reality behind those “life-time earnings” statistics. By the time you add in the opportunity cost of not working during college (or not working full time) and paying back 10s of 1000s of non-tax deductible student loan payments over the years, and the general inflation of education degrees relative to salaries, college and especially graduate school is not nearly as good a deal as students are led to believe.
In the long run I believe that cost and funding sources of higher education in the US as well as laws on the discharge of student loans may shift, but (to steal a line) in the long run we are all dead. In the meantime, real people have to worry about paying the bills and medical insurance and saving for retirement in the face of Social Security’s collapse. For some of the most heavily indebted immigration to a more friendly jurisdiction is the only way to realize a future that does not involve near poverty while working and certain poverty in old age.
Thanks so much for what you have written here. I realize your post is more than 2 years old, but I thought I’d reply anyway. Did you decide to leave?
By the time I realized that higher education wasn’t going to open any doors to “a better life” and “a higher salary” for me, I was already mired in student loan debt. It’s hell.
My student loan debt is over $190,000. There’s no way I can pay $1200 a month. I seriously want to just leave. The only other option is suicide as staying here will surely mean eating beans or cat food for the rest of my life, not having health insurance or any quality of life to speak of. I would have been better off never stepping foot on campus.
I’m 45 y/o, and the extent of my trouble with the law was a traffic ticket on Easter Sunday 2004. I would love to ask you (or anyone else here who knows) a few questions about becoming an expatriate. I’m drowning.
My email address is rseigmeyer@yahoo.com
I didn’t leave the country due to student loans, but after an international marriage and immigrating, I probably won’t pay them back. We were barely getting by before and it’s been nice to actually have more than $10 (well, not really $’s in this country, but you get the idea) in the account after everything’s been paid.
You go from owing student loans for 10-30 years then right into unreasonable insurance premiums. Why don’t they just raise the tax rate to open up health care and education and get it over with instead of these fake taxes we’re all paying?
I have $140,000 in student loan debt and have been diagnosed with bi-polar disorder. Unable to pay back loans due to disability. The “SYSTEM” was unforgiving, including my application for social security disability. So I flew across the Atlantic, with no intention of returning, in order to avoid a life of hell.
God, I feel like a Jew fleeing from the Nazis.
That sounds like THE answer to my problem as well. Were you able to find work?
I know it has been two years since you made this post but perhaps someone out there is feeling the same way we are. I am experiencing the EXACT same destitute situation and I have been saying for the past 2 years since the Social Security Admin CLAIMS I owe back pay of over $50,00. They say they never should have given me disability even though I was diagnosed with an incurable mental illness bi-polar disorder. To make matters worse I owe about $140K in student loans because I was determined to educate myself inspite of the grim prognosis of living with mental illness. And I suspect we need a bit of “icing on this cake” my parents died both, at age 42 and they worked the same jobs for over twenty years. They never got a dime they put into the lottery called social security. I did draw from their monies for some years when I was in college, but the government still claims I owe them and even GARNISHED my income tax last year! I want out of this hell whole so BAD. So I will continue with my research in figuring out a way to get the hell out of here for good. If I stay here another year…I’ll never make it I barely have food and money to survive as it is….
I left the U.S. almost 10 years ago. I defaulted on my student loan shortly after I left.
After about 8 years, they finally found me. They must have found me on Facebook, LinkedIn or something like that (after 8 years I figured they weren’t looking for me anymore and if they were, I didn’t really care). Since then, they call me every once in a while, or send me letters threatening to garnish my wages.
They can’t garnish wages or witheld taxes administratively because I don’t have any in the U.S. Fortunately, U.S. law applies in the U.S. only and local laws don’t allow wage garnishment. Anything else they can do to try to collect would have to go thru the legal systems (U.S. legal system and Foreign legal system). Then there’s the local statute of limitations, which doesn’t exclude U.S. student loans and has expired a long time ago.
Hey – I just read this because my blog has been on hiatus for a while, but if you’re interested, I’d love to write up a little post about your story. I will keep it anonymous if you like.
Hello all,
I too, am making plans to leave the country. I left medical school after two years in the MD program. But at 75k a year, that adds up. My total debt is now about 200k, with undergrad added in. Monthy payments are set at 2,500 a month. As stated by other members, this amount of debt is crushing, and removes any incentive to make money in this country.
Just hoping I can get residency somewhere, and fast.
I lost my job because they tried to garnish my wages, so I ran to china to teach english.
My cleaning ladies’ daughter is a legal resident. She arrived in the US at age 17. Her 6 years at a state university including room and board were paid for with student loans and grants. She never held a job or participated in a work study program. She traveled to Europe and India on her summers off. She graduated 3 days ago and wants to find work in her native Colombia. I bet she has no intention of paying back her student loans.
Meanwhile, I’m told I should pay more in taxes.
Did you know the State of Texas can take your license if you are a real estate agent and default on a state loan? Other licensed professionals are apparently at risk as well: http://www.studentloanjustice.org/Texas.htm
true… you know what they say…Go where the puck will be, not where it is – Wayne Gretzky