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- Some student loan borrowers are leaving the country to keep from paying their debt, according to CNBC.
- The federal government can’t garnish wages for borrowers working abroad. Yet the loans do not go away, and likely balloon after late fees and interest.
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Some student-loan borrowers have fled the country to keep from paying their loans, according to a report on CNBC.
One borrower told CNBC he relocated to India after failing to find a well-paying job after college. There, he found the cost of living much cheaper than Colorado. While there isn’t data surrounding how many borrowers went abroad to avoid paying off debt, individuals who’ve fled the country shared their stories to Facebook groups and Reddit channels focusing on the student-debt crisis.
The federal government can garnish wages and tax refunds for borrowers working in the US, but not abroad. The debt does not go away, however, and typically would increase quickly with compound interest and late fees. Borrowers who decide to come back to the US and continue not to make payments could even get sued, according to Joshua Cohen, a lawyer specializing in student loan debt.
Americans who stick around are struggling to pay off their loans. Student-loan debt has the highest 90-day delinquency rate of all other household debt, like mortgage and auto loans, according to Bloomberg. Some economists say nearly 40% of borrowers could default on their loans by 2023.
Solutions to student debt are likely to be at the forefront of the 2020 presidential race. Sen. Elizabeth Warren, a 2020 Democratic presidential candidate, offered a plan to eliminate student debt for 42 million Americans, funded by taxing billionaires.
One borrower who fled to Japan told CNBC she worked multiple jobs to pay off her loans, but still could not afford health insurance. "I wish I could come back to America and not be scared," she said.
Read the full story on CNBC.
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Source: Business Insider – feedback@businessinsider.com (Allana Akhtar)