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I Left the United States Because of My Student Loan Debt. What Now? – Blair

“Dear Steve,

I earned a Master’s degree and spent a year on the job market before taking a job with the City of New York. It required said Master’s but didn’t pay enough for me to maintain a decent standard of living (a shared flat without rodents, a diet that didn’t consist of 50% instant noodles) while repaying my $130,000 in student debt that I naively took on between my two degrees, honored to have been accepted to my “reach” schools with just a bit in the way of scholarships.

After looking for better jobs around the country, I made the decision to move abroad. I was able to pay off $12,000+ in credit card debt and a little under $20,000 in private student loans while making my degrees irrelevant by working in ESL.

I’ve now moved to another country and work in my field for a not-for-profit. I have about $10,000 in private student loans, $9,000 in credit card debt and the rest in government loans.

If I could get a not-for-profit job in the U.S., I would but as a few of my former classmates have been on the hunt for some time, I’m not willing to risk going back home to qualify for debt forgiveness.

Considering the job market, I don’t foresee a move back to the States. I don’t want to be a slave to my student loans any more, but it’s not in my character to just not pay.

At this point, should I:
1. Pursue a 401c3 status for a health charity that serves people in developing countries that I run with my family with the goal of getting loan forgiveness through my work with them? I do ~10 hours of work every week for them, mainly with research, building partnerships and developing educational material.
2. File for bankruptcy? While I am employed abroad, I don’t earn much in USD. With even $500/month, what it’d take for me to pay my debt off in 30 years, that’s a third of my net income. At the moment, I’m paying $1,000/month for credit card debt and that simply isn’t sustainable as this comes at a HUGE cost.
3. Do something else?

Blair”

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The Answer

I Left the United States Because of My Student Loan Debt. What Now?   Blair

Dear Blair,

Can you break down for me how much of the remaining debt is federal and private. It makes a difference in my answer.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

I Left the United States Because of My Student Loan Debt. What Now?   Blair
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Blair

    Hi Steve,

    So sorry for not checking back earlier. I really appreciate it.

    I have $10,000 in private student loans, $9,000 in credit card debt and probably now ~$120K in government loans with interest included since I finished undergrad. A relatively negligible amount of it Perkins.

    I pay $50/month to Sallie Mae because I signed up for hardship deferment when I was job hunting. I was paying about $400 in credit cards while setting aside 800-1,000 USD per fortnight to transfer to the U.S. in a few months for the purpose of paying off my credit card. I’m now considering defaulting to reduce the overall bill. I have $470 in my US account and about $7,000.

    Every fortnight – net in USD:

    income:

    - full-time work ~ $1,700*

    - odd jobs, selling things, the odd participation in some research, etc. – $100

    regular expenses:

    - room rental with utilities inclusive, groceries – $450

    - minimum requisite health insurance – $100

    - public transport – $70-90

    This “budget” doesn’t include unforeseen expenses, living expenses, etc so I get very upset with myself when I add up receipts and see that I’ve spent more than $800. It’s a horrible cycle. As such, I’m trying to find more side jobs.

    *might change to about 1,900 as I just learned that I’m paying more than the requisite tax

    The net cost for grad school (exclusive of room and board) was $84,000. It can only be higher now. I was so happy to get into my “reach” school (top 3) that I immediately accepted instead of thinking of the crippling debt that would come with it, though I could have gone to a very good school (top 25) for what now seems like nothing as I got a nice financial aid package. While my experience in grad school was incredible, it is the worst decision I’ve ever made and I wish I could go back and knock some sense into my 21 year old self. Can’t turn back time now so have to deal…

    • http://GetOutOfDebt.org Steve Rhode

      “Knock some sense into my 21 year old self.” LOL. Amen to that!

      The 401c3 approach isn’t going to work because I believe you have to work 30+ hours per week for them for the next ten years to get the benefit from that.

      What appears to be a reasonable approach would be to consolidate your federal loans and get on the income contingent or income based program. This will give you a much lower payment and if your income does not increase much, after an extended period of time the loans would be forgiven.

      See https://loanconsolidation.ed.gov/loancalc/servlet/Controller?controller_task=startCalculator

      As silly as this may sound, even though the credit card debt is only $9,000 it might make logical sense to consider bankruptcy for that for two reasons.

      1. It would stop you from having to look over your shoulder for years to come.

      2. It would clear room for you to start saving for unexpected events.

      Steve

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