People in The Netherlands have done this. They go to S/E Asian countries to skip out on a €30,000 debt. After a while your passport becomes invalid which makes travel very difficult. And with the outstanding debt you are not able to get a new passport.
Which is dumb, because you only have to pay off the debt if you are able to, interest rate is very low, you can pause it for a few years and after 35 years the loan is automatically forgiven. It's not a big deal. Completely uprooting your life to skip out on a €50/month payment is insanity but people see that €30,000 number in their portal and freak out about it.
Approximately 25,000 emigrated debtors are currently untraceable by the student debt collector.
In the US, student loan interest rates and average amount of debt are generally much higher than other countries. And you your student debt is designed to be permanent so that even declaring bankruptcy doesn't discharge it.
Its essentially just a tax you pay for using higher education. You pay that in other countries as well via your taxes. Your tax debt is also permanent so you can't get out of paying taxes just by declaring bankruptcy.
It is a bit weird that they let universities levy indirect taxes but its not really bad. Imagine if instead of property tax you have government property loans and the interest of those loans was instead of property tax, I think that wouldn't be a bad system.
> Passport Blocks: Arrears exceeding €5,000 can result in registration in the passport alert system, making it impossible to receive a new passport,
I would say that is pretty serious violation of human rights, for relatively small infraction. Soviet countries used similar system to prevent people from leaving their communist paradise.
How are you supposed to pay your debt, if you are not allowed to find new job abroad?!
US does same for very small child support debts (I think around $1000) as well as larger tax bills. Of course when I cross to/from Mexico by land at small crossing I've noticed most have no passport and just beg for forgiveness which usually works.
South almost never checks anything whatsoever so it's a moot point there unless you're crossing in a major city like Tijuana. On many occasions even the guy at the metal detector has been sleeping. (Also note: Mexico never changed law like US, in Mexico it's still legal to enter with only a birth certificate and ID)
Going North into america I'd say the majority don't have passports and they are let through anyway. I actually have a legal US passport and I watched myself detained, jailed, and interrogated while everyone without a passport was let through with a birth certificate and state driver's license (this is modern times, not the days when that was all you needed). So maybe it is worse to have a passport as it's suspicious as most people at the lesser land crossings do not.
I don’t think it’s that hyperbolic. But I agree that the existence of debts shouldn’t invalidate one’s right to a passport.
(The counter argument is that passports are a privilege and citizenship a bundle of privileges and duties. Why should the country have the burden of passporting someone abroad who as abandoned it.)
Education is also a privilege. And universities should have no power to block people from leaving a country. It is like Emirates preventing people to go home, because of unpaid speeding tickets. Or Qatar confiscating passports of Indian workers.
They only do this if communication with the debtor is impossible. If this happens to you, you can contact the government, schedule a payment plan for your debt and then they give you a passport with a 12 to 24 month validity.
My best guess is that the embassy in the foreign country gets a red flag when you try to renew your passport and you then have to contact the government debt collector. Different branches of government.
I mean, my monthly student loan payments in the US for a degree in healthcare is $1300 USD per month. It comes out to about 40% of each paycheck. That’s a significant amount. I’d honestly consider moving abroad to avoid paying it. It’s debilitating and I can barely survive while making payments.
Wow. For The Netherlands it is 4% of your income, but only the part of your income above minimum wage. If you earn €40k, minimum wage is €26k then you pay 4% over €13k = €520 per year = €43 per month.
The average medical student is around €50,000 to €60,000 in debt.
In the US, student loan interest rates tend to be close to market (which I find despicable) and there is no automatic forgiveness. In fact, student loan debt has extra rules in the US making it difficult to get discharged in bankruptcy, so even that route doesn't work for a lot of people.
Same reason I can't easily start an AT&T/Verizon competitor.
Doesn't mean their pricing is that reasonable, or that funding education should be run this way in the first place. It just means there are big barriers to entry, often established by the existing players to protect their margins. The Fed rate for student loans should be lower.
Had to look it up, it is 2.3% for 2026 which is a bit below the Euribor 1 year rate. Between 2017 and 2022 it was 0%.
Loan forgiveness happens after 35 years so for most academics that is about 10 years before retirement. Forgiveness also happens upon death.
Bankruptcy is a bit different here. We have a program where someone manages your finances for about three years, and after that most remaining debt is forgiven. However, student debt is an exception, that one stays
Comforting I'm sure. But it wasn't always that way:
"Six years after the death of Christopher Bryski, a 23-year-old student at Rutgers University, Key Bank has agreed to forgive his student loan. But Bryski's family is not stopping there: It's now fighting to change the laws in the hope of sparing others the trauma it endured as lenders continued to hound it for payment on its dead son's debts."
And it might not be mandatory:
"But it is guidance, not law, and it does not cover creditors collecting their own debts, as they are not covered by the FDCPA (Fair Debt Collection Practices Act)," she said.
Paying your debts is a business decision, not a moral decision. There is nothing moral about paying your debt to a bank and nothing immoral about not paying your debt to a bank.
Businesses do this ALL THE TIME. Businesses can do this, and will walk away from debt the second when the math makes sense. If it's okay for businesses, then the exact same behavior should be okay for us humans to do. I walked away from my house at the height of the financial crisis. It was a business decision, because the mortgage was far larger than the value of my house.
Student loans are the only reason why tuition has gone up 10x in 30 years. Every financial entity from banks to schools feel like it's okay to hang students out to dry with large debts because they will have to pay for it for the rest of their lives. I hope a large portion of the debt disappears because the students simply walk away from the US.
In my opinion, if you agree to a deal and then decide not to fulfill your end of the deal, that is immoral. Like if you agree to pay me to make you a sandwich and then you take the sandwich but leave without paying, that is immoral.
If you are in a casual agreement with a friend and don't keep up your end then it's immoral.
If you have a contract that specifies expectations and consequences, then it's just a business deal.
The (predatory) school loan business works from contracts and they are obligated to keep up their side only as much as you are yours.
The real immorality is not accepting the consequences embedded in the contract to which you both agree to, it is that the United States has such a business in the first place.
Well actually second place I guess. When the student loan business started it was not predatory. But it got horribly abused, by the borrowers who would declare bankruptcy gaming that system, schools who raised rates because they knew loans were available, and the lenders who astroTurfed children into believing that it was a good bargain to exchange $200,000 at high interest for a Art History degree
That is how bad countries are made. Good countries are made by people thinking that its also wrong to steal from the government.
For example you should never ever vote on politicians that waste tax money. Some countries do that, but USA is not one of them since Americans thinks its moral to steal from the government so they don't blink an eye over every president using millions on his own or his wifes personal projects. "I'd also do that if I was the president" is how that gets perpetuated, you have to stop voting for any such candidate and only vote for those that promises to put an end to it. That would mean voting third party, but...
> Ms. Tully was on an income-based repayment plan, which allows many borrowers to have their remaining debt forgiven after 20 years of making qualifying payments. She was paying $60 per month when she defaulted. This amount, to many, may seem manageable. But for her, it remained psychologically burdensome.
$60 a month for 20 years, and then the debt is forgiven doesn’t sound burdensome at all. Perhaps if she doesn’t return to the US it won’t matter, but it seems a small price to pay monthly to make returning to your home one day a whole lot less stressful.
The psychological burden comes from the endless harassment and attempted scamming from the lenders. They don't just accept your IDR and let you quietly pay $60/mo forever. It's 20 years of endless threatening calls, "urgent notices," surprise debits that must be fought. They'll delay or outright "lose" your annual recertification paperwork every year, reverting you to to some outrageously high "default" plan.
Plus the threat that a hostile administration might come in and change who qualifies for IDR at any point, which just happened and is causing a massive spike in defaults.
I genuinely couldn’t figure out why the article highlighted her. If it were any other publication, I’d suspect rage baiting. But maybe HN sees something I didn’t.
The NYT had a rough patch a while back but it's incredibly good nowadays. They absolutely didn't have to include the details here (like $60/month) but did because they care about the truth.
The most frustrating part of the student loan question is that you can still GET THESE LOANS! The schools will sell you into indentured servitude today! They'll take the money and don't care at all! They take ZERO responsibility for the student loan crisis.
I'm Canadian, but I know someone from the US who did this. She's living in Paris, moderately successful in academia and as far as I can tell, completely happy to never return to the US. Her family goes to visit her in Europe once in a while.
"Ms. Tully was on an income-based repayment plan, which allows many borrowers to have their remaining debt forgiven after 20 years of making qualifying payments. She was paying $60 per month when she defaulted. This amount, to many, may seem manageable. But for her, it remained psychologically burdensome."
At this point I'm of the opinion that taking out burdensome loans for all but a handful of high earning degrees is a negative signal of intelligence, regardless of how you did in the classes. The concept of a loan, interest rates, and expected ROI is not beyond the grasp of an eighteen year old adult.
She's from Colorado and decided to go to an out of state university (Oregon) and pay full out of state tuition for a degree in "historic preservation"?
Yeah no shit you just signed up for a lifetime of debt.
Reminds me of another story of some lady that got saddled with a couple hundred thousand in debt because she really wanted to go to Duke for a theater management degree. And then fled with her Russian fiance to Moscow so she wouldn't have to pay it.
We all agree that higher education is too expensive in the US. But these are not good examples of that.
Debt is a social construct that the dying olds keep ramming down the next generations throats.
It's ageism and exploitation of youth.
The ledger is never getting paid off because it doesn't exist as anything more than allegory.
We can pay it off with allegory too if we must walk through such incantations for the semantics police.
What a joke of a culture to validate the ramblings of Abe Simpson.
Good in these students. Live anywhere else until America becomes less of a shit hole country. Even if that means dying never stepping foot in the US again.
I'm eligible for dual citizenship and am in the process of acquiring my second citizenship.
My reasons are two-fold:
1.) I've fallen through the cracks and ended up in a situation the system did not account for. I had a medical incident during my last semester of graduate school that turned out to be a presenting relapse of Multiple Sclerosis. Obviously I couldn't have anticipated this when I went to undergraduate and graduate school. The problem comes in in that the system treats disability as completely binary: Either you can't work at all/can work so little you can't earn more than 1600/mo, or they assume you're fine and can pay everything off. I can work, but I can't work in the field or to the level that I planned for before I got ill. In addition, I have expenses working full time that an able bodied person doesn't just to allow me to do that full time work and that aren't considered in the income based payment calculations. So I fall in the hole of 'make too much to be considered disabled, but not enough to actually pay' due to a condition that is incurable. Also, I have a special Medicaid exemption that allows me to earn more without losing healthcare, but not enough to actually pay back my loans. So even if I could get and maintain a job that would pay a salary that would let me pay, I'd then lose my healthcare and I'd hit the out of pocket maximum every year on any private plan, resulting in a substantial decrease in actual salary.
There's functionally no way for me to pay my loans: If I give up the supports I pay for to pay my loans, I can't work full time anymore and can't pay my loans. the jobs that would pay over 100k in this state (what I would need at minimum to cover supports, healthcare I'd lose, and loan payments) won't hire someone who needs frequent time off, a bunch of employment flexibility, who can't work overtime, and can't be subjected to too much stress. I can barely work one full time job, so additional jobs or hustling isn't an option. I'm just stuck.
2.) I don't consider the US government to be a trustworthy contract partner at this point. I was one of the people who consolidated my loans to take advantage of the SAVE program under Biden's administration. They've struck down SAVE, but haven't done a thing for those of us who consolidated our loans and added to the principal because we trusted what we were told by the government. If I can be told by the government that doing something will help me, and then 2 years later they reverse that with no recourse offered, that tells me none of the terms can be depended on. If our own government's answer to this is 'you shouldn't have listened to the government, sucker', then well... I don't trust them to fulfill their end of the contract, and I don't particularly like the idea of owing money to an institution with both an extreme amount of power over my life and no intent on sticking to agreements or dealing fairly with me. It makes me nervous, especially for 10-20 years down the road.
105 comments
Which is dumb, because you only have to pay off the debt if you are able to, interest rate is very low, you can pause it for a few years and after 35 years the loan is automatically forgiven. It's not a big deal. Completely uprooting your life to skip out on a €50/month payment is insanity but people see that €30,000 number in their portal and freak out about it.
Approximately 25,000 emigrated debtors are currently untraceable by the student debt collector.
It is a bit weird that they let universities levy indirect taxes but its not really bad. Imagine if instead of property tax you have government property loans and the interest of those loans was instead of property tax, I think that wouldn't be a bad system.
> Passport Blocks: Arrears exceeding €5,000 can result in registration in the passport alert system, making it impossible to receive a new passport,
I would say that is pretty serious violation of human rights, for relatively small infraction. Soviet countries used similar system to prevent people from leaving their communist paradise.
How are you supposed to pay your debt, if you are not allowed to find new job abroad?!
> I've noticed most have no passport and just beg for forgiveness which usually works
in which direction? headed south or back north?
Going North into america I'd say the majority don't have passports and they are let through anyway. I actually have a legal US passport and I watched myself detained, jailed, and interrogated while everyone without a passport was let through with a birth certificate and state driver's license (this is modern times, not the days when that was all you needed). So maybe it is worse to have a passport as it's suspicious as most people at the lesser land crossings do not.
>
that is pretty serious violation of human rightsI don’t think it’s that hyperbolic. But I agree that the existence of debts shouldn’t invalidate one’s right to a passport.
(The counter argument is that passports are a privilege and citizenship a bundle of privileges and duties. Why should the country have the burden of passporting someone abroad who as abandoned it.)
"Everyone has the right to leave any country, including his own, and to return to his country."
Passports shouldn't be a privilege, and violation of the universal declaration of human rights is pretty serious.
>
violation of the universal declaration of human rights is pretty seriousNo, it isn’t. It isn’t even legally binding. (And obviously couldn’t be. It would invalidate incarceration and conscription, for example.)
>
universities should have no power to block people from leaving a countryThey don’t.
>
They block your passport because they can't reach youWouldn’t one applying for a passport involve the government and person connecting on some level?
The average medical student is around €50,000 to €60,000 in debt.
Risk premium is on top of the other bits.
>
student loans are deeply low-risk to the lenderBased on the other comment, they absolutely reflect that.
edit: Yeah, that other comment is talking about European rates, not American rates.
https://studentaid.gov/understand-aid/types/loans/interest-r...
6.39% to 8.94%, and that's for Federal. Private ones tend to be even higher.
Private student loans are similarly protected from bankrupcty, and don't have things like income-based repayment; they are, if anything, safer for the lender. https://studentaid.gov/understand-aid/types/loans/federal-vs...
[1] https://home.treasury.gov/resource-center/data-chart-center/...
Doesn't mean their pricing is that reasonable, or that funding education should be run this way in the first place. It just means there are big barriers to entry, often established by the existing players to protect their margins. The Fed rate for student loans should be lower.
>
there are big barriers to entryWhat are the barriers? Can I make non-dischargeable student loans at 5%?
Loan forgiveness happens after 35 years so for most academics that is about 10 years before retirement. Forgiveness also happens upon death.
Bankruptcy is a bit different here. We have a program where someone manages your finances for about three years, and after that most remaining debt is forgiven. However, student debt is an exception, that one stays
> Forgiveness also happens upon death.
Comforting I'm sure. But it wasn't always that way:
"Six years after the death of Christopher Bryski, a 23-year-old student at Rutgers University, Key Bank has agreed to forgive his student loan. But Bryski's family is not stopping there: It's now fighting to change the laws in the hope of sparing others the trauma it endured as lenders continued to hound it for payment on its dead son's debts."
And it might not be mandatory:
"But it is guidance, not law, and it does not cover creditors collecting their own debts, as they are not covered by the FDCPA (Fair Debt Collection Practices Act)," she said.
https://abcnews.com/Business/bank-forgives-dead-students-loa...
Businesses do this ALL THE TIME. Businesses can do this, and will walk away from debt the second when the math makes sense. If it's okay for businesses, then the exact same behavior should be okay for us humans to do. I walked away from my house at the height of the financial crisis. It was a business decision, because the mortgage was far larger than the value of my house.
Student loans are the only reason why tuition has gone up 10x in 30 years. Every financial entity from banks to schools feel like it's okay to hang students out to dry with large debts because they will have to pay for it for the rest of their lives. I hope a large portion of the debt disappears because the students simply walk away from the US.
Investments don't always work out, tough luck. That's obviously not the same as buying a sandwich.
If you are in a casual agreement with a friend and don't keep up your end then it's immoral.
If you have a contract that specifies expectations and consequences, then it's just a business deal.
The (predatory) school loan business works from contracts and they are obligated to keep up their side only as much as you are yours.
The real immorality is not accepting the consequences embedded in the contract to which you both agree to, it is that the United States has such a business in the first place.
Well actually second place I guess. When the student loan business started it was not predatory. But it got horribly abused, by the borrowers who would declare bankruptcy gaming that system, schools who raised rates because they knew loans were available, and the lenders who astroTurfed children into believing that it was a good bargain to exchange $200,000 at high interest for a Art History degree
― Abbie Hoffman
For example you should never ever vote on politicians that waste tax money. Some countries do that, but USA is not one of them since Americans thinks its moral to steal from the government so they don't blink an eye over every president using millions on his own or his wifes personal projects. "I'd also do that if I was the president" is how that gets perpetuated, you have to stop voting for any such candidate and only vote for those that promises to put an end to it. That would mean voting third party, but...
Bad countries are made when people let other people break the rules with impunity.
If the legal system fails to stop bad people from breaking rules it's up to us to stop them.
And we can't outright use force like the state can, so that means using subtle means of degrading their ability to break the rules.
> Ms. Tully was on an income-based repayment plan, which allows many borrowers to have their remaining debt forgiven after 20 years of making qualifying payments. She was paying $60 per month when she defaulted. This amount, to many, may seem manageable. But for her, it remained psychologically burdensome.
$60 a month for 20 years, and then the debt is forgiven doesn’t sound burdensome at all. Perhaps if she doesn’t return to the US it won’t matter, but it seems a small price to pay monthly to make returning to your home one day a whole lot less stressful.
Plus the threat that a hostile administration might come in and change who qualifies for IDR at any point, which just happened and is causing a massive spike in defaults.
https://www.dailymail.co.uk/news/article-15705545/New-York-T...
Perplexing.
Say what? $60 per month is not that much!
Yeah no shit you just signed up for a lifetime of debt.
Reminds me of another story of some lady that got saddled with a couple hundred thousand in debt because she really wanted to go to Duke for a theater management degree. And then fled with her Russian fiance to Moscow so she wouldn't have to pay it.
We all agree that higher education is too expensive in the US. But these are not good examples of that.
It's ageism and exploitation of youth.
The ledger is never getting paid off because it doesn't exist as anything more than allegory.
We can pay it off with allegory too if we must walk through such incantations for the semantics police.
What a joke of a culture to validate the ramblings of Abe Simpson.
Good in these students. Live anywhere else until America becomes less of a shit hole country. Even if that means dying never stepping foot in the US again.
I'm eligible for dual citizenship and am in the process of acquiring my second citizenship.
My reasons are two-fold:
1.) I've fallen through the cracks and ended up in a situation the system did not account for. I had a medical incident during my last semester of graduate school that turned out to be a presenting relapse of Multiple Sclerosis. Obviously I couldn't have anticipated this when I went to undergraduate and graduate school. The problem comes in in that the system treats disability as completely binary: Either you can't work at all/can work so little you can't earn more than 1600/mo, or they assume you're fine and can pay everything off. I can work, but I can't work in the field or to the level that I planned for before I got ill. In addition, I have expenses working full time that an able bodied person doesn't just to allow me to do that full time work and that aren't considered in the income based payment calculations. So I fall in the hole of 'make too much to be considered disabled, but not enough to actually pay' due to a condition that is incurable. Also, I have a special Medicaid exemption that allows me to earn more without losing healthcare, but not enough to actually pay back my loans. So even if I could get and maintain a job that would pay a salary that would let me pay, I'd then lose my healthcare and I'd hit the out of pocket maximum every year on any private plan, resulting in a substantial decrease in actual salary.
There's functionally no way for me to pay my loans: If I give up the supports I pay for to pay my loans, I can't work full time anymore and can't pay my loans. the jobs that would pay over 100k in this state (what I would need at minimum to cover supports, healthcare I'd lose, and loan payments) won't hire someone who needs frequent time off, a bunch of employment flexibility, who can't work overtime, and can't be subjected to too much stress. I can barely work one full time job, so additional jobs or hustling isn't an option. I'm just stuck.
2.) I don't consider the US government to be a trustworthy contract partner at this point. I was one of the people who consolidated my loans to take advantage of the SAVE program under Biden's administration. They've struck down SAVE, but haven't done a thing for those of us who consolidated our loans and added to the principal because we trusted what we were told by the government. If I can be told by the government that doing something will help me, and then 2 years later they reverse that with no recourse offered, that tells me none of the terms can be depended on. If our own government's answer to this is 'you shouldn't have listened to the government, sucker', then well... I don't trust them to fulfill their end of the contract, and I don't particularly like the idea of owing money to an institution with both an extreme amount of power over my life and no intent on sticking to agreements or dealing fairly with me. It makes me nervous, especially for 10-20 years down the road.