As the cost of college increases, a student-loan crisis looms over the United States. The problem with student loans is that it doesn’t allow recent graduates to take risks, test different career options, or follow dreams. Instead, they accept their first job offer to alleviate student loan debt as fast as possible.
If you’re struggling to pay back your student loans, moving to another country may seem promising. Better job opportunities and a lower cost of living could assist with managing expenses. But, is moving to a different country to avoid your debt a good idea? Keep reading to learn how leaving the country could affect your student loans and for ways to pay them back more efficiently.
Federal Student Loans Don’t Go Away
If you decide to return to the United States, you won’t be able to enjoy life as you once did. Almost immediately, you’ll become a target of the IRS. The debt you tried to escape will only be more considerable. The government will find a way to obtain its money one way or the other.
Keep in mind that federal student loans do not have a statute of limitations. The government can take you to court no matter when you return to the United States. Besides, interest will continue to accrue, and overdue payments will rack up.
Your Family May Have to Pay Your Debt
When student loan lenders can’t find you, they will seek out any cosigners. If you have family members on the loan, the responsibility of paying the debt then turns to them. A life of financial success cannot start by pushing your debt onto another person.
How to Handle Student Loans
Running off to a new country shouldn’t be Plan A. So, what are some options when it comes to paying off your loans?
Start Paying Your Loans While You’re Still in School
It’s easy to become overwhelmed by student loans. Some of your monthly payments go toward the principal, while some go toward the interest. An easy way to reduce the burden is to start paying off your loans when you’re still in school. Even as little as $20 a month beginning freshman year can significantly reduce your payments once you graduate.
Pay Off Capitalized Interest
Unless you received subsidized loans by the federal government, interest will likely accrue while you’re still in school and during your grace period. That interest then capitalizes once repayment begins. Capitalized interest is the unpaid interest that gets added to your student loan balance after periods when you don’t make payments.
Consider making monthly payments while interest is accruing to avoid capitalization. You could even save up and make one lump sum payment before the grace period ends. Doing this won’t speed up the payoff process, but it will mean a smaller balance to pay off.
Make Extra Payments
There’s no penalty for making extra payments on your student loans. For instance, if you owe $130 every month, consider rounding up to $150 or even $200 each month. Paying more each month will allow you to pay off your balance sooner.
However, student loan services may apply the extra payments to all of your bills. If you plan on utilizing this tactic, inform your servicer to apply overpayments to the current balance, keeping monthly payments the same.
Receive Help from the Expert Debt Attorneys at McCarthy Law
If you’re experiencing student loan debt, consider reaching out to the expert debt settlement attorneys at McCarthy Law. We can help our clients negotiate debt for a fraction of what they owe. We believe that finances are a personal matter, and you should discuss them with a qualified debt attorney.
Call us today at (855) 976-5777 or complete our contact form. We’ll help you erase your debt, restore your life, and get your life back on track.