Student Loan Payments

[ibrahim123]

I am new to the International Teaching circuit and in my 20s with over 40K in student loan debt. I wanted advice if it is worth trying to pay off my student loans with the excess money from an international teaching career or if I should just continue to pay the minimum until . . .

[Flyingpigs]

Debt is always a good thing to pay off, no? Less time on the debt, less interest, less cost in the long run.
Why not wait until you get a job, see what you are bringing home, and see if you can afford to pay more into the debt. Even an extra 100$ or so a month makes a difference.

[josephine]

My advice is to pay it off as soon as possible, especially before starting a family. No fun having that ball & chain when you have a family to take care of...

[ibrahim123]

Thank you for the advice. I am the first in my family to go to college so this is brand new to me and most of the people in my networks (who are also first geners).

I am glad I asked.

[josephine]

Depending on your type of loans, you may be eligible for repayment assistance programs. There is one in the US for federal loans, called the public service loan forgiveness. After 10 years of on-time payments during work with a US based public service agency (such as a public school) all remaining loans are forgiven. Good option if you don't get an international job paying high enough. Also remember to always ask your provider if there are any interest rate deductions available (for paying on time, automatic payments, etc). All the best

[optimistia]

I agree with the posts above, pay it off! I haven't gone international yet, but even working in the States I have been trying to pay above the minimum payment each month, even if only by $50 or so (though usually more). I also throw any "extra" money I get straight at my loans (babysitting, tax refunds, etc.). After three years I am almost $4000 ahead of my payment schedule and for the most part I didn't even notice paying a little more each month. It is such a good feeling to be ahead! I was a first-generation college student too, so I understand how daunting it is! Good luck! :)

[Micky]

I was in the same position. After two and a half years abroad, two being in a so called 3rd tier school. I am now at 25,000. Mine was also at 40,000 at the beginning. I budget carefully and anything left over goes directly onto my loan. My advice, live frugally and budget carefully. Each penny counts and put everything you can directly onto your loan. Good Luck

[SpedMaestro]

If you're planning on making a career of international teaching then why bother paying them back? I know I won't. The only thing that it effects is your credit score, an irrelevant number outside that sinking ship called the US of A,

[sid]

SpedMaestro wrote:
> If you're planning on making a career of international teaching then why bother paying
> them back? I know I won't. The only thing that it effects is your credit score,
> an irrelevant number outside that sinking ship called the US of A,

If only that were true (I still wouldn't do it, as it's wrong).
But in any case, it's not true.
If you default on your student loans, you face all the normal issues associated with any debt you don't pay: harassment from collection agencies (who will contact your family and friends repeatedly if they can't find you), inability to get further loans (like when you want a mortgage), legal action, garnishment of your wages or any assets in the US, penalties added to your debt in addition to the compound interest racking up every day. You might not have any assets now, and you might be right in thinking that 'they' can't do anything to you now, but life is long and most international teachers don't stay overseas forever. It's far easier and cheaper to take care of this now, then to face the far larger problem in 15 years when your perspective is a bit different.
And here's the kicker, particularly if your loans are from US government programs: if you default while overseas, they can flag your passport and arrest you on re-entry to the US. Arrest, as in handcuffs, one phone call, jail until you make bail (which would almost certainly involve you turning in your passport as a person at high risk of flight), not allowed to leave the country until your legal case is finished, revocation of your teaching license after conviction of theft/fraud/whatever the actual charge is. So even if you manage to stay away for years and years, when you finally turn up for your mom's medical emergency, expect to be caught. It'll make a great CNN story.
Taking money from someone, promising to pay it back while intending to run away instead, that's out and out theft. It shows moral bankruptcy. Please don't apply to my school, I don't want you teaching my kids.

[sid]

Oh, and how could I forget. Most students have a co-signer, usually a parent, on their student loans. Don't pay, and your parent is responsible for paying it back. That'll be a fun conversation at family reunions.

[ibrahim123]

Thank you everyone for your responses. I am definitely going to pay it back. It's good to see the different approaches. I will do as many of you said, really focus on paying it off with extra money I make.

Thank you Micky and optimistia for sharing your experience. That is really encouraging!

[sid]

I completely agree with most of the posters here, and I can add my story too. I paid off my student loans in half the time by making all the extra payments I could. It was such a load off my mind to have it done. On most international salaries, it's easy to put some extra away each month, and every extra bit saves much more than one might expect, with the power of not paying compound interest on those bits.

[Cheery Littlebottom]

You could consider continuing to pay the minimum and look at the returns you could get by investing your excess money elsewhere. Look at the interest rates on your loan and on potential investments. It may be worth while to get more return on investments than putting it into the loan.
Just a thought.
Good luck!

[jayhawk]

Hi ibrahim,

Fellow first-gen here. I wanted to add a bit from my own experience. After school I took an ESL position in Saudi, the first offer I got, and immediately went to work on my debt. I would suggest starting with the obvious, pay off the highest interest rate loans first. This is what I did. I just saved for a month or two and then paid them off one at a time, in full. In less than a year I had paid off $35K in debt. What I have left are some low interest loans (<2.5%) that I make only minimum payments on because, if my Math and assumptions are right, inflation is my friend, in this case.

What I want to share next though, is what I think can be the difference maker. I lived on a diet of primarily rice and beans. With a bit of inspiration this can be quite satisfying. There are so many ways to prepare them. I normally eat Indian style, but one can switch it up with flavors from Latin America, France, the US, Iran, pretty much anywhere. I usually only ate meat once a week and would treat myself every couple of weeks. To me this isn't much of a sacrifice and the feeling of being debt-free, for the most part, a year out of school, was something else.

Good luck.

[ibrahim123]

Hey there are a lot of us first geners out here!

LOL Jayhawk! Well I guess the fact that I was raised on eating rice as a staple part of my diet and could not live without it (lol) will work in my favour.

Thank you again everyone. Previous to posting this I was convinced I would be paying off this high cost education for the rest of my natural life. But as you all said, with good planning I can really knock a lot of it out.