What Happens to Student Loan if You Move Abroad?

Due to the rising cost of college, more and more students are taking out loans to pay for their education, and even successful people aren’t able to pay them off until they’re well into their thirties, forties, or even fifties. Students are prevented from taking risks, testing out different career prospects, or following unconventional dreams by these student loans, especially if they don’t have a spouse or children to worry about. One of the first and most attractive solutions for those wondering how to get out of student loans is to leave the country.

What Happens to Student Loan if You Move Abroad?

Moving abroad is not the solution people expect unless they plan to never return to the country again unless they want to escape their student loan debt. Since federal student loans don’t have a statute of limitations, the government can always bring you to court when you return to the country.

Even though private lenders have their own set of rules, you may still be subject to collection agents. Your payments may be demanded by them.

Moving abroad isn’t an easy fix for your student loans

It is not possible to build a bright financial future by avoiding your responsibilities, but, most importantly, moving overseas to get out of debt is just unrealistic because the debt will follow you wherever you go. Even though moving abroad has a number of financial benefits, you cannot just leave the country, stop paying, and hope for forgiveness. That’s naive, and it could have unintended consequences for you.

Get out paying your student loans by moving abroad- A big Myth

There is a myth that circulates around the internet that if you move abroad and stop paying your student debt, you can effectively cancel it. If you default on your student loan, you can experience the following consequences:

  • Garnishment of wages
  • In the case of a tax refund and a Social Security benefit offset
  • The loan balance is increased by collection fees and late fees
  • An adverse effect on your credit score
  • You may lose your professional license

Is it possible to move abroad if you have a student loan?

Student loan debt does not prevent you from moving abroad. You are not prohibited from doing so. You may find that leaving the country is the best financial decision you can make.

Changing locations could result in a better job, better healthcare, or a better cost of living. Your school debt won’t just disappear, but there are rules you can leverage to legally lower your monthly payments to the minimum amount until you’re eligible for forgiveness.

Things to keep in mind while getting a student loan

  1. YOU SHOULD NOT RELY ON STUDENT LOAN FORGIVENESS- You’re stuck with debt for life even if you go bankrupt, so you won’t be free from your debt by moving to another country, no matter where you move to. While you’re away, all that you’ll be doing is racking up more and more interest. In other words, if you’re moving away and expecting your student loan debt to disappear by the time you get back, you’re unlikely to be successful.
  2. Your financial future may be at risk if you default on a student loan- Defaulting on a student loan can have a huge impact on your financial future and citizenship in the country.
  3. Your credit score will be affected badly if you default on student loans- Your lender may report you if you fail to make your payments, which can negatively affect your credit report for years to come. A low credit score or a mark on your credit report will make it extremely difficult for you to get a new credit card, take out another loan, or apply for a mortgage upon your return to the country. 
  4. Defaulting on a loan can lead to serious legal issuesA loan default occurs when you fail to make a payment for 270 days without having arranged a deferment with your lender. This is essentially a failure to comply with the terms of the loan contract. 

Paying your student loan debt from abroad

Paying off your student loans from your local bank account is likely to be the best option if you have moved abroad and want to keep paying your student loans. Thus, as an ex-pat, it is important to have access to your funds abroad and to complete regular transactions without having to worry about withdrawal fees or other charges, so opening a local bank account is important if you plan to live abroad for a long time.


When students don’t have a spouse or kids at home, student loans prevent them from taking risks, exploring different career prospects, or following unconventional dreams.

Some recent grads are taking the first job opportunity they can get to get out of their massive student loan debt as quickly as possible, instead of testing the waters and finding their best path. Moving abroad becomes an increasingly common practice. Thanks for reading, I hope this information will help you to find the best solution for the above situation. We will keep you updated and informed in the future.

Also Read

How to Cancel a Student Loan Before Disbursed?

How To Get Out of Default On A Student Loan?

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