Some Americans are so crushed by student debt they're leaving the country

Some Americans are so crushed by student debt they're leaving the country

Brian Baker

6 min read

The burden of student debt is causing some Americans to do the unthinkable: leave the country.

With more than 40 million borrowers (1) owing $1.833 trillion (2) in federal student loans, and 7.7 million defaulting (3) on those debts, a small but growing number of alumni are packing up and moving abroad. It's not for the sake of a fresh start, but rather to put distance between themselves and their debt.

According to a survey from the Institute for College Access and Success (4), 42% of student loan borrowers have to decide on making a monthly payment or covering their basic needs, which is largely why 20% of them are currently in delinquency or default.

For others, ditching delinquency and default status altogether seems like the only option. The perceived hack is about survival. For others, it's their frustration bubbling over after years of debt repayments, with little to show for it.

Amanda Lynn Tully graduated from the University of Oregon in 2017 with $65,000 in federal student loans, but no job offers for her undergraduate degree in historic preservation.

"The payments weren't even paying off the interest, so it was frustrating," Tully told the New York Times (5).

While the idea of escaping student loans may sound like a loophole, the reality is far more complicated and potentially risky.

Why some borrowers are leaving

With no job prospects and enrolled in an income-based repayment (IBR) plan, which allows borrowers to have their remaining debt forgiven after making qualifying payments for 20 years, Tully moved to Prague, Czechia.

Although her payments through the IBR program were $60 a month, they weren't even paying off the interest on her loans. According to Federal Student Aid (6), some payment plans can be as low as $0 per month, but this amount is subject to change as your income increases or decreases.

The three different types of income-driven plans include Income-Based Repayment (IBR), Income-Contingent Repayment (ICR) and the Pay As You Earn (PAYE).

For Tully's IBR plan, if she borrowed money after July 1, 2014, the percentage owed from her discretionary income would be 10% over 20 years. If she borrowed before that date, it would be 15% over 25 years. The ICR plan is 20% over 25 years, while the PAYE plan is 10% over 20 years.

The Trump administration's temporary pause of the IBR program in July 2025 caused headaches for most borrowers, but it was reinstated in October. As of then, there was a 74,510-borrower backlog (7) waiting for their Public Service Loan Forgiveness (PSLF). That provides debt cancellation to those who've spent a decade working for certain not-for-profits or the government.

Michele Zampini, Associate Vice President of Federal Policy and Advocacy at The Institute for College Access and Success (TICAS), has seen many graduates like Tully struggle with debt repayment, no matter how low their payments may seem.

"The psychological weight of carrying debt is a really widespread issue, even if it seems financially manageable," she told the New York Times (8). "It's not necessarily 'I can't afford it.' It's sometimes 'It feels like I had no other choice but to go to college and I had to take out loans to go, and now I'm going to be stuck with this,' which can define people's lives in a way that feels very unfair and harmful."

Still, no matter where a person goes in the world, their debt is still active, according to a Baltimore lawyer who specializes in student debt.

"Federal student loans are contractual debts," Stanley Tate told the New York Times (9), adding that the responsibility to pay them back does not disappear, regardless of citizenship.

One option for those looking to move abroad to avoid or minimize the financial albatross around their necks is the foreign earned income exclusions, which allows federal student loan borrowers who live abroad and earn less than $130,000 a year to pay $0 per month under an income-driven repayment plan.

It's a better option than allowing your debt to fall into delinquency or letting it default altogether.

Experian (10) has encouraged borrowers who have moved away to resist the temptation to stop making payments.

"The federal government offers more leniency than private lenders when it comes to missed payments and default," writer Ben Luthi shared on Experian's blog. "Generally, your loan servicer won't report a late payment to the credit bureaus until it's 90 days past due, and you won't be considered in default until you've gone roughly nine months without making a payment."

If you do let your loans default, there are three stages (11):

After one day, one missed payment will result in your loans being delinquent, and you may be charged late fees.

After 90 days of non-payment, a servicer will report your account as delinquent to the three main credit bureaus — Equifax, Experian and TransUnion — which means it will impact your credit report and lower your credit score.

After 270 days of non-payment, the loan is officially in default, and the debt could be sent to a collections agency.

The Department of Education Loan Servicing has issued a guide (12) to help borrowers reduce delinquency and avoid default.

If you're feeling overwhelmed by student debt, there's comfort in knowing that you're not alone. But leaving the country isn't the only option, and it's not the safest one.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.

Federal Student Aid (1); Education Data Initiative (2); Federal Student Aid (3); The Institute for College Access and Success (4); The New York Times (5)(8)(9); Federal Student Aid (6); CourtListener (7); Experian (10); SoFi (11); Department of Education Loan Servicing (12)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.