As I have in the past, I threw out a basic question last week: who has fled the US as a result of their student loan debt? I also asked the exact same question a few years ago - 2012 to be precise - and received a number of responses. Moreover, in 2011, I wrote an article for USA Today titled, "Unemployed, educated, and indebted: More Millennials seeking work outside the U.S." So it is clear, the topic is not a new one for me. Interestingly, this particular topic intersects with individuals who have high levels of medical debt, something that interests me greatly and something I am keenly aware of, despite what adversaries may claim either here or elsewhere. In any event, I want to share a recent comment from one person who decided to flee the U.S.
There is a growing group of debtors who have left. That is clear. I knew them in South Korea when I lived there in 2010. That isn't the only place they go. While the debtors I knew there hadn't defaulted, I think it is safe to say that they fled as a result of their student loan debt. Plus, the economy was in the tank, so they needed to find work in order to service their student loan debts (Ah, yes! America, a place where you get an education in order to service debt so that some guy can own a lot of Maseratis and numerous homes in the Hamptons and elsewhere, while millions of folks remain indebted for life. That's the American dream).
Anyway, there is another group of debtors who have chosen to default on their loans and apparently flee indefinitely. One of them, who wrote a comment, and which I share his remarks below, calls himself a "student loan debt fugitive."
Here's what he had to say:
I am a US expat who is a 'student loan debt fugitive.' There are many of us here in the EU.
If anyone wants the full text of what I typed. let [sic] me know your email or something. but here is a small piece of my total comment:
I am living outside the country with US student debt. I won't bore you all with my story, but the end game is I cannot possibly pay it back. Even if I were to enter IBR the amount forgiven would be equal to hitting the lottery and having to pay taxes on that amount would be insurmountable. In my not always humble opinion IBR is a political scam to basically kick the can down the road without actually forgiving debt. What it does is turn a civil debt into a criminal tax liability.
Anyway, it is pretty obvious I am in default. I graduated 3 years ago and my roughly monthly net pay was not going to pay my medical school loan. I attempted to contact my creditors and work out a plan and both the federal and private lenders basically told me I could get a short term relief, but there was no solution for more than a year. They also straight out told me they had absolutely no incentive to negotiate because 'they would get their money one way or another.'
The country I am in does discharge student loans in bankruptcy. In fact, a judge can declare you bankrupt on the spot. My estimated monthly student loan payment is more than 3 times a doctor's gross salary here.
No court here would accept the amounts and penalties the US imposes. In fact, the law here has its own ideas what is an acceptable penalty and they do not include collection or attorney fees. The interest is modest at 6%. So when my creditors called I simply said 'sue me!' (I may have mentioned that any lawsuit must be in the native language and filled out in the requirements of the local law.) The reality is nobody in their right mind from the US would sue me here. They would pay enormous fees for translation and local legal aid, to watch me be declared insolvent on the first court appearance. The statute of limitations for suing over debt here is 3 years anyway, so in a few months I could just claim that.
I actually encourage people, if you can't pay your US student loans, pack up and move. I think it is foolish not to. Sometimes I feel bad about not being able to pay the money back, but I suspect just like homesickness, it will fade with time.
I know that lenders, the government, or private, have absolutely no remorse about any immorality they subject me or my family to. They created laws to benefit them. I moved somewhere that the laws benefit me. They are more than welcome to call and negotiate a reasonable settlement. But I suspect they really just don't want to bother. Neither of us has any incentive to give concessions to the other. I keep hearing that my life would be destroyed if I moved back to the US. But honestly... Move back to what? Difficulty renting a place to live? Difficulty getting a job because of student loan default? Pay garnishments? Shame? Not getting my drivers' license renewed? Not being able to have a professional license? Harassed non-stop by creditors? Give up my legal advantage? A lower quality of life and more expenses for my family?
That is insanity. Why would anyone go back to that?