I Live in the UK and Can’t Afford My Student Loans and Don’t Know What to Do


Dear Steve,

I am a US citizen currently living in the UK and have been for 5 years. I have student loans and around $60,000 and I am finding it difficult to pay my student loans based on income and being so far away.

Living in the UK makes it difficult for me to pay my student loan payments, and my cost of living doesn’t allow me to pay them either. I do not have any plans to move back to the US, but need to know how I can address my loans from this distance. If nothing else, what would happen if I stopped paying my loans?

I hope you can help. Thank you.



Dear Samantha,

Are these federal student loans or private. It makes a difference in my answer. Post the update in the comments section below.


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6 thoughts on “I Live in the UK and Can’t Afford My Student Loans and Don’t Know What to Do”

  1. Hi. I am in the same situation and all fed loan on income repayment. 9 years so far of payments, no plans to move back to USA.

    I know the total accrued loan amount, after 20 years of payments left over, becomes part of your year gross income after the time limit and you will owe the IRS a chunk as taxes, but is there a way to determine how much tax I will owe after I determine the interest added when I get to the 20 years?

    • I wish there was but how this will all be dealt with in 20 years by the U.S. Congress is so up in the air that all we can do is base plans on what the current reality is. If you are insolvent when the debt is forgiven there would be no additional tax due, you could later file bankruptcy after the tax is determined to eliminate it, or you would owe income tax on the forgiven debt at your current tax rate.

  2. These are federal loans. I have tried to do Income based payments, but this barely addresses interest rates. Essentially, because I tried to better myself and my education level, I have put myself into a worse situation. 🙁

    • The reality is the income-driven repayment plan is probably the best approach at this time since these are federal student loans. You could stop paying but if you ever planned on returning to live in the U.S. then the defaulted federal debt will create more problems than it solves. If these were private student loans then the advice would be different.


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