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Students Escape Loans Overseas

Published 10/27/08 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

Unable to cope with rising monthly payments and creditor harassment, many Americans are being driven into exile in the hopes of escaping their student loans, according to CNN Money.

Students in the United States are increasingly burdened with debt obligations. This is not necessarily because they spend unwisely on credit cards – though many obviously do – it is because they are buried under their own student loans. Loans are often the only way students can afford to pay for a higher education, yet the pressure of loan payments is making college more trouble than it is worth. In many cases, the burden will be carried for the rest of that student’s life.

Most students prioritize to pay off their incredible student debt first, putting off buying a house or car, moving out on their own, or getting married and starting a family. The indebtedness of the American college-educated population is changing the way these students interact in society. In too many cases, the only refuge for a student is literal exile. They become credit fugitives, hiding overseas to avoid financial disaster at home.

Most people know that in extreme cases an individual can file bankruptcy, and with some struggle emerge with a clean slate to restart his or her life. However, filing for bankruptcy is not a simple process and it is hardly an ideal situation. Bankruptcy filers emerge with zero credit, little to no assets and the lowest possible borrower rating. Despite these hardships the biggest obstacle, their personal debt, is largely removed.

There are several agencies that will help students go through what is essentially “student loan bankruptcy.” However, most students do not understand the process, or know that it is even an option. In instances of particular hardship students can request payment deferrals and in some cases have their debt partially or fully forgiven. Groups like Finaid.org offer information to students regarding aid repayments, and credit counseling services are available to help set a path toward recovery.

Regardless, the problem presented by college loan debt in the United States is a major challenge facing all future generations. In the past, public institutions in the U.S. were economical to all students who qualified for acceptance. With the cost of college tuition skyrocketing more students have to fall back on loans, leading to more loan defaults – it is estimated that there is over $60 billion in defaulted student loan debt in the United States.

The United States needs a well-educated population to compete globally and regain its once prominent position in the world economy. But it cannot achieve this goal when its best and brightest citizens are crushed under the cost of their achievements.

Source CNNMoney:

Carl, a Florida native now living overseas, is afraid to move back to the United States. That's because he can't afford to pay his student loans.

…

"It was made clear that if I ever came home, I'm screwed," says Carl.

…

"If it means I have to live in exile from friends and family...well, that's the breaks. So be it. But I won't put my family in a situation where they are afraid," he says.

While most Americans are burdened with debt of some kind, student loan repayment can be a particularly scary prospect for young people struggling to start a career. Payments are often higher than expected, and the loans can't easily be discharged. Added pressure from debt collectors causes some grads to flee their loans by fleeing the country.

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