What Happens to My Student Loans If I Move Abroad?

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Moving abroad can offer better jobs and higher income for some graduates. You can start your career and a new life in a foreign country. But you can't leave your student loan debt behind when you go.

Yes, you still need to pay back your loans. (Sorry.)

Moving out of the country doesn't absolve you of your obligation to repay your student loan debt. You'll still need to make your payments. You're responsible for your student loan debt, whether you choose to live in the U.S. or not.

So, what happens if you move abroad and stop paying your loans?

You're not the only person who's asked this question. Nothing can stop you from moving abroad and stopping payments on your loans. But there are consequences for doing so, regardless of where you call home.

If you stop making payments, your lender will consider you delinquent. Remaining delinquent and continuing to not make payments for more than 270 days puts your loan into default. That's bad news for your finances.

Default hurts your credit score and triggers the entire balance of the loan to be due at once. It can also provoke legal action against you. If you think you can dodge all this because you live in a different country, you may be right...sort of.

Foreign borders offer some protection (but not forgiveness).

You will still be legally responsible for your loans in the U.S. even if you move abroad. But if you don't earn income from U.S. companies, don't pay U.S. taxes, and don't live in the U.S., there's not much lenders and debt collections agencies can do to collect money from you.

Until you come back into the country, that is. Coming back onto American soil means these companies can pursue legal action against you. This includes garnishing your wages and tax returns.

While you're gone, your credit will suffer, you'll lose any access to loan repayment or forgiveness programs, and you may have trouble opening financial accounts (both at home and abroad).

Debt collectors can also find your family members and harass them about your defaulted student loan debt.

What to do instead of ignoring your student loan debt

If you're struggling to make your student loan payments, don't move abroad in an effort to dodge your debt. Take these steps instead:

Take a look at your finances and redo your budget. How can you cut costs? Can you negotiate higher pay or take on additional work to earn more money? Explore your options and get creative.

If you have federal loans, check out repayment plans and forgiveness programs available to you.

Call your loan servicer and ask about your options. They can work with you to change your payment plan or schedule or provide resources to help you get on the right financial track.

Your student loan debt doesn't disappear, even if you try to. You're still responsible for your loans even if you move abroad, so make sure to create a plan to continue payments until your loan balance is 100% repaid.