JumpCrisscrossStudent Debt Burdened Them, So They Moved Abroad and Stopped Paying
https://www.nytimes.com/2026/04/04/business/student-loans-abroad-default.html
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.
Perplexing.
> moderately successful in academia and as far as I can tell
Why not pay your debts then? I totally understand debt forgiveness for extenuating circumstances (and imo, it's a crime that student loan debt can't be forgiven, and the interest rates are often predatory—especially in the case of med school and law school), but this just sounds like stealing with extra steps.
I may be wrong but I read “moderately successful in academia” as meaning: they have succeeded in gaining some social capital but make little money
Sorry - didn't mean to be vague but I don't want to out my acquaintance too much. She has a good job in STEM. I think she does fine for herself and I would have thought her capable of paying the loan.
Yeah. I don't know the extent of her debt or current income, but she went to an in-state school for a STEM degree, she's not someone who got a useless degree from an overly expensive school. She definitely doesn't seem to regret her decision, whatever the financial or moral considerations.
As I said, I'm a bit perplexed.
[dead]
Which part perplexes you?
That they're Canadian.
But jokes aside, I'm curious too. Nothing there seems too extravagant, people move abroad all the time. Maybe it then takes them 30 years to realize they didn't have it so bad after all and move back. I'm not speaking for the US here specifically, but more generally. Those longer term stories I think are more interesting.
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 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.
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
Yeah, I find this deeply frustrating. Interest rates are supposed to reflect the level of risk, and student loans are deeply low-risk to the lender.
> student loans are deeply low-risk to the lender
Based on the other comment, they absolutely reflect that.
I don't think the other comment is accurate.
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.
7/1/21–6/30/22 3.73%
7/1/20–6/30/21 2.75%
7/1/19–6/30/20 4.53%
7/1/18–6/30/19 5.05%
7/1/17–6/30/18 4.45%
7/1/16–6/30/17 3.76%Hmm. I wonder why it doesn’t make sense to launch a private lender that offers lower rates.
The Fed rate is too high for the low risk involved.
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...
Sure. I’m saying why couldn’t you and I start C & J Lenders Inc. and undercut those guys. Say, 5% for a 20-year loan [1].
[1] https://home.treasury.gov/resource-center/data-chart-center/...
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.
> 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.
> that is pretty serious violation of human rights
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.
> universities should have no power to block people from leaving a country
They don’t.
They do, state owned education
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.
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.
> 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.
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 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.
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.
In my opinion, if you make a $50,000+ bet on an 18 year old's future career, whether or not that bet works out for you is entirely your problem.
Investments don't always work out, tough luck. That's obviously not the same as buying a sandwich.