Student loans question

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Student loans question


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Old 14th February 2011, 05:58 PM
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Hello,

My husband and I are trying desperately to move overseas to Australia and New Zealand, and to do that, we've gotten new degrees to meet the skills shortage requirements.

However, between all the fees and moving expenses, we don't know how we're going to keep paying off our student loans, which are over $100,000 at this point. We've been paying faithfully for years, but haven't made a dent.

1. Can I be arrested, have my wages garnished, have something bad happen to me if I have to default on those loans while in Australia / NZ?
2. My husband's degree is a license to practice, he has to be evaluated by the national board of whatever country he's in. If we default on the loans, could he have his license pulled by the issuing college in the states and be ineligible to work in Australia anymore? Would the national board of that country be able to know that he defaulted or is the testing based on his skills and those alone?

Thank you for any help you can give!

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Old 14th February 2011, 06:18 PM
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I wanted to add this note:

I'm not doing this with the intention of skipping out, I'm just concerned because our payback amount is so high, that for a year or two during the move, we might not be able to make this payment and I don't want it to impact our life over there in the long run if we have to go into default at any given time. They've refused to give us a "deferment" because we're moving overseas.

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Old 15th February 2011, 02:55 AM
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Quote:
Originally Posted by Drakelah View Post
I wanted to add this note:

I'm not doing this with the intention of skipping out, I'm just concerned because our payback amount is so high, that for a year or two during the move, we might not be able to make this payment and I don't want it to impact our life over there in the long run if we have to go into default at any given time. They've refused to give us a "deferment" because we're moving overseas.
Hi there

What a difficult situation for you. It annoys me that people have to go into debt by so much now to get what in my time in the UK was a 'free education'.

Has anyone else out there found themselves in a similar situation?

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Old 15th February 2011, 06:46 AM
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Quote:
Originally Posted by Drakelah View Post
I wanted to add this note:

I'm not doing this with the intention of skipping out, I'm just concerned because our payback amount is so high, that for a year or two during the move, we might not be able to make this payment and I don't want it to impact our life over there in the long run if we have to go into default at any given time. They've refused to give us a "deferment" because we're moving overseas.
Hi

I have had this situation with the UK Student Loans Company, and again, couldn't look to make any repayments while I was setting up here. I couldn't honestly say whether they could trace/track you down, or whether they could impact on your ability to work in another continent and country...who knows?!?!

I HAVE been able to default, however. I stated that I was being sustained by my partner, he was the only income, and that there wasn't enough spare money to support payments for the time being. He had to write a letter supporting this, we had to provide proof of childcare and income etc, and we were granted a 1-year "stay of execution". I really don't know how this applies when you are American. The best advice is to actually speak to the pepole there...over-estimate how little money you will be earning, and see what they say.

It can't hurt to test the water!

Good luck

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Old 15th February 2011, 08:18 PM
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Originally Posted by jenswaters View Post
Hi

I have had this situation with the UK Student Loans Company, and again, couldn't look to make any repayments while I was setting up here. I couldn't honestly say whether they could trace/track you down, or whether they could impact on your ability to work in another continent and country...who knows?!?!

I HAVE been able to default, however. I stated that I was being sustained by my partner, he was the only income, and that there wasn't enough spare money to support payments for the time being. He had to write a letter supporting this, we had to provide proof of childcare and income etc, and we were granted a 1-year "stay of execution". I really don't know how this applies when you are American. The best advice is to actually speak to the pepole there...over-estimate how little money you will be earning, and see what they say.

It can't hurt to test the water!

Good luck
The US has a student loan system similar to a debtor's prison, you can never get rid of the loans unless you die or are basically homeless with no chance of improvement. One my friends died while in school, and the loan company went after her parents, suing them to get the money that she'd taken out, and they hadn't even co-signed. In the US, even if you declare bankruptcy, the loan stays with you, ruining your credit in the US and making it virtually impossible to get good work since a lot of employers are doing credit checks on new employees now...

It's why I'm frankly, terrified of having to declare default, because they told me they would refuse my request regardless and I better pay on schedule or face fines and court. When I explained the situation to the loan officer on the phone, he told me to keep myself in this country until I had paid off my debt if I knew what was good for me. This is partially why I'm wondering if they really can't come get me, he seemed nervous about my overseas move and kept inquiring into which country.

It's just... they've made this so hard and so complicated that I'm really kicking myself that I didn't go the school in the UK like my friends.

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Old 15th February 2011, 08:22 PM
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Paying back your student loan is as simple as choosing the correct tax code once you start working, although you can also make voluntary repayments on top of your compulsory payments if you’d like to pay off your loan more quickly.

If you earn more than the repayment threshold of $19,084 – around $367 a week – you’ll be required to start making compulsory payments, which are deducted from your pay as you earn. While your student loan will accrue interest, this interest is wiped each year for student loan borrowers working in New Zealand. If you live outside of New Zealand the interest rate is 6.6 percent.

You’ll receive regular statements from Inland Revenue Department so you know the balance of your loan and how much you have left to pay back each year.
That's part of my problem, I'm not allowed to adjust the amount. The US loans are set unless I can demonstrate that I'm in poverty and I don't know how I would do that during a move? If the repayment was only $300-$500, I think I could do it, but it's going to be close to $1,000 a month and they won't look at moves overseas as "deferments" or anything.

I'm just curious, would New Zealand garnish my wages during my start up there to pay them off if the US government decided to go after me in an NZ court?

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Old 18th February 2011, 01:07 AM
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The government of New Zealand asked both Britain and Australia to help it recover loans from students who emigrated after graduating.

Both countries weren't interested so New Zealand using international debt collection agencies to find debtors and recover the money. I think it is highly likely that America will do the same, this may be where New Zealand got the idea from.

My advice to you is to not skip any of your loan payments because the mechanisms are there to find you and make you pay.

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Old 23rd February 2011, 02:29 PM
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Well, all I know is that when I applied for my passport, it came with a little chip inside and they told me that the chip is to share information (probably criminal) with certain countries - and I remember NZ and OZ being two of them. I am not sure what that information covers, but still.

The point is, that if it were regular credit cards or even a mortgage, it may not be a problem - because at this point, banks do not have access nor can they chase you down for debt that is not collateralized. But federal loans are somewhat different - the govt does penalize you for not paying them back, and it will come out on your tax statements. Oh, and I just remembered that US citizens traveling abroad are still subject to pay federal taxes - I believe for 10 years or so.

I would speak to an immigration lawyer - even if it's just for a consultation, that information they can give you.


Last edited by stormgal; 23rd February 2011 at 02:32 PM.
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