- Some student borrowers leave the country to stay away from paying their debts, according to CNBC.
- The federal government cannot guarantee salaries for borrowers working abroad. Nevertheless, the loans do not go away, and probably balloon after late fees and interest.
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Some borrowers have fled the country to abstain from paying their loans, according to a CNBC report.
A borrower told CNBC he moved to India after not finding a good paying job after college. There he found the cost of living much cheaper than Colorado. While there are no data on how many borrowers went abroad to avoid paying debts, individuals who have fled the country shared their stories with Facebook groups and Reddit channels focusing on the student debt crisis.
The federal government can guard payroll and tax refunds for borrowers working in the United States but not abroad. However, the debt does not go away and will usually increase rapidly with compound interest and fees. Borrowers who decide to return to the United States and continue to make payments cannot even be sued, according to Joshua Cohen, a student loan debt counselor.
Americans who stay around struggle to pay their loans. Student loan debt has the highest 90-day default rate for all other household debt, such as mortgages and auto loans, according to Bloomberg. Some economists say nearly 40% of borrowers could standardize their loans by 2023.
Student loan solutions are likely to be ahead of the 2020 presidential election. Sen. Elizabeth Warren, a democratic presidential candidate in 2020, offered a plan for to eliminate student debt for 42 million Americans funded by taxing billionaires.
A borrower who fled to Japan told CNBC that she was working several jobs to pay out her loans, but still unable to afford health insurance. "I wish I could come back to America and not be afraid," she said.
Read the full story of CNBC.