student loan laws and evasion
it seems that congress LAST WEEK stopped all consolidation loans for
students who want to pay back their loans in a manageable way.
if one were to move to europe or canada for say 10 years could one get
out of paying for student loans?
The only way to avoid paying your student loan, far as I can tell, is
pretty damn drastic: Die or Become highly disabled. And even becomming
highly disabled won't work - I know a young woman who was in a serious
car accident, is now paralyzed from the shoulders down, blind, unable to
talk, and recently had to go back to living on a ventilator. Her
request for disability deferment was refused. :( She's still appealing
it.
Unlike other forms of debt, bankruptcy is not necesarily an option,
either. The only times your student loans will be released by a
bankruptcy court is if you have made regular payments for seven or more
YEARS, and even then, the odds are against you.
You could simply not pay it. But then you risk having your IRS refunds
garnished. Your paycheck can also be garnished AND THEY DO NOT
NECESARILY HAVE TO NOTIFY YOU BEFORE THEY START GARNISHMENT. All they
have to do is make a "good faith" effort to contact you that garnishment
proceedings are in the works. Most scholarship programs and virtually
all state and federal student aid programs would refuse you, should you
decide to return to school at a later date. Forget about getting a
mortgage to buy a house, or even a loan for a car. Some jobs will be
out of your reach. The only "good" thing is the defaulted loan will be
removed from your credit reports in about 7-10 years.... but the debt
itself simply will never go away.
I know. I've been dealing with this for FOURTEEN YEARS now - and my
single loan was paid off 4 years after I took it out. Due to a human
error on the part of the Education Department of the state where I
attended school, my credit has been royally screwed for most of my adult
life. I PAID MY LOAN - yet it still haunts me - I've been fighting it
for the last seven years, and I'm about to give up and just pay what
they claim I owe them to get it over with and get on with my life. I've
spent so much money fighting the State for what is right that I probably
could have paid for two or three years at Harvard :) My case is a bit
unusual in that *I* did not default - but the results are the same. I'm
screwed on my credit, I'm screwed if I try to get financial aid to
finish my degree, I've been screwed three times on good jobs I've
applied for, and I'm tired of playing games with W4 forms every year to
ensure I end up OWING taxes each year so my tax "refunds" do not get
garnished. Fortunately, my lawyer has been very effective in preventing
my wages from being garnished... but it has not been cheap nor has it
been easy.
I recognize that your question may be more of a "what if" type of
question than a serious consideration, but I am curious as to how you
would intend to support yourself in a foreign country. It's not exactly
easy to get a work visa in other countries, nor is it easy to find a
job!!
Whether or not Congress has removed the consolidation option is almost
but not quite besides the point... the banks are still able and
sometimes even willing to work with you on payment plans. If you are
making payments on your loans on time, you might even be able to get a
"real" loan to pay off all the student loans, thereby consolidating them
yourself instead of having to pay them off all individually, and you
might even be able to spread your payments out over a longer time.
Of course, the simplest way to get "out" of paying your student loans is
DO NOT GET ANY STUDENT LOANS. Work, go to a state school, go part time,
apply for scholarships, find organizations that offer scholarship
"loans" that are repaid for you by you working for them, become a
resident of the State of Georgia and use their HOPE program, join the
Army, join the Peace Corp...
Student loans are like ANY debt. If you borrow the money, you must pay
it back. Even if you do not graduate.
Believe me, I detest the student loan system as it is - it's got to be
one of the most ineffecient government programs out there. The only one
who really benifits from the student loan system in America, in my
opinion, is the banks. The amount of money the Government spends each
year paying for the deferred interest and administering the loan
programs could probably be better spent simply granting the money and
would probably help far more students - but then the schools would
simply raise their tuitions to cover the amount the government granted
If you take out a loan, you got to pay it back. If you don't want to
pay it back, don't take out any loans.