
Americans who fled the country to escape their student debt - SQL2219
https://www.cnbc.com/2019/05/25/they-fled-the-country-to-escape-their-student-debt.html
======
rayiner
So the article mentions the average college graduate has $30,000 in debt,
which doesn't actually seem that bad. That's the average price of a new car in
the U.S. (And, until recently, the average American bought a new car every ~4
years.) The usual rule is that student debt shouldn't exceed your expected
first year income, and the median starting salary for a college graduate is
considerably over $30,000. So the debt load seems quite in line with
recommendations.

The article is also missing key bits of information. For example, Chad
graduated in 2011, and started in 2007. So he should be eligible for federal
income-based repayment, which should key his student loans to his income
level. That's a really important fact. 92% of all student loan debt is
currently owed to the federal government. Although there have been various
programs over the years, those loans have had some sort of income-based
repayment plan since 1994:
[http://www.ibrinfo.org/existingidr.vp.html](http://www.ibrinfo.org/existingidr.vp.html).
Currently, your payments are 10% of your income above 150% of the federal
poverty level. So if Chad is making about $25,000 per year (corresponding to
about $1,700 per month take home), his payments would be just $640 per year,
or $50 per month under the current PAY-E scheme.

I find it curious that articles on the student debt crisis never mention that
information. I feel like these articles always pick out exceptional cases
(recent graduates who have private loans, for example, even though almost all
new student loans are federal). Then they try to link it to the overall $1.6
trillion student debt issue, failing to mention that almost all of that debt
is subject to the federal government's income-sensitive repayment options.

~~~
discreditable
Is the average American buying a _new_ car or _new to them_ car every 4 years?
Last I checked, new car loan terms are 3-5 years.

~~~
sharkmerry
they have 6 or 7 years now

average is 65 months for new cars

[https://www.autotrader.com/car-shopping/buying-a-car-what-
te...](https://www.autotrader.com/car-shopping/buying-a-car-what-term-should-
your-loan-be-222114)

~~~
gruez
Doesn't look like that includes leases

------
mdorazio
Relevant quote that applies to most of the stories in this article: "but, he
said, his difficultly finding a college-level job in the U.S. has made that
debt oppressive nonetheless." The problem isn't just that students are
graduating with debt, it's that they are graduating with debt and degrees that
don't translate into actual good job prospects anymore.

I think it's also worth mentioning that the "leave the US for a cheaper/easier
lifestyle elsewhere" choice isn't new. I met dozens of expats when I lived in
China 15 years ago who were there because they could make ends meet and still
have fun doing little more than teaching English. The only difference now is
that if you ever come back to the US you're pretty much screwed.

~~~
USNetizen
Absolutely agree. We as a society have put so much emphasis on earning a
college degree that people are attaining worthless ones at too high of a rate
and finding themselves buried in debt with no way to pay it off.

It doesn't help that basic financial literacy isn't taught in grade school
anymore, either. Too many times, a graduate's first lesson in managing
finances and debt comes in the form of a default notice from a lender.

The other problem I see here is that the whole mentality of being able to run
away from your problems is, well, problematic. These things will only get
worse if you don't address them. What they don't apparently realize is, one
day, they're going to want to come back to the U.S. for one reason or another
just to find out that their mound of student debt has grown into a mountain of
defaults which prevents them from even holding certain jobs, getting credit,
finding housing, and basically functioning comfortably in society.

~~~
bluGill
I do think you should be able to declare bankruptcy on worthless degrees.
Banks (note that I have a problem with government loan subsidies) should face
the risk and not loan to a student getting a worthless degree.

What I can't figure out is how to stop someone who gets a useful degree from
declaring bankruptcy right after graduating and then getting a job using that
degree. This is fraud.

~~~
PretzelFisch
You never really know when the market would be saturated with degree x since
it takes 4 years to earn. On the other end banks may decline a degree that if
taken now will start to be high demand when the candidate graduates.

~~~
bluGill
If you have a electrical engineering degree in generators right before someone
discovers a cheap over unity solar panel (coming up with a way to violate the
laws of physics is left as an exercise to the reader) thus making all
generator specialists valueless - most of your EE course work still applies so
you just need pivot a little. Maybe you need an additional year of school to
get in demand skills, but the odds that you can't find something that it is a
low risk to get you into is low.

If you have a degree in music - we already know that field is saturated. If
you studied only music you have a few years left to get a course of study that
is useful.

------
oldjokes
This is a totally valid move in my opinion, as well as just circumventing the
trainwreck of a healthcare system to seek treatment overseas.

If congress continues to be negligent in its duties then this is really the
only viable path forward for many people. If a large enough percentage of
people bail on their student loans/medical debt then eventually dozens of
predatory banks and "medical billing" companies will go out of business and
then we can actually start to change things.

~~~
microcolonel
But who pays? The fools who bought the loans, or the public who mostly paid
theirs (if they ever took any to begin with)? I suspect that everyone will
pay, despite a minority of people benefiting, that hardly seems just.

I don't think it's predatory, I think the lendee is a fool being led by the
blind; but does that make it right for it to suddenly be everyone else's
burden?

People make dumb decisions that affect only them all the time; when is it
suddenly my business to subsidize people's personal mistakes? Are they even
mistakes at all, if the debt is forgiven without prejudice? I don't want to
live in a world where taking a loan you have no intention of paying is not a
mistake.

Also, AFAIK a huge majority of student loans are held directly by the Federal
government (which is the other reason I fear "forgiveness" is on the horizon);
assuming you don't mean to call the Federal government a "predatory bank".

~~~
oldjokes
We could slice 10% (maybe less) off the military budget and pay for college
for everyone, forever. This "who pays" nonsense is just that: nonsense.

I'm sure the Navy would find a way to make do with a mere nine aircraft
carriers.

If you're worried about freeloaders getting welfare they don't deserve then
slashing the insanely corrupt grifting that goes on every day in DHS/Defense
should be your top priority.

~~~
drocer88
Perhaps we could cut back on entitlements , too. That would bring bigger
savings and help with the governmental fiscal responsibility thing. Lower debt
would let people keep more of their money to spend on making their lives
better.

~~~
yardie
Entitlements are exactly that. You, the taxpayer, paid for them, you are
entitled to use them. How about we cut the things we pay for but aren't
entitled to use, like the military.

------
MBCook
This seems like one of those articles where they cite a handful of cases and
then draw a big trend line from it. The article says no one tracks this which
means it could easily be only a dozen or two people a year at most.

Interesting idea though.

------
Tehchops
> "He then went back to school to pursue a master’s degree in comparative
> literature at the University of Colorado Boulder."

So:

* Get degree

* Struggle to find steady/career employment in a job market still rippling from a massive recession

* Decide the best ROI is to go _back_ to school for a Master's in Comparative Literature

While I'm totally cognizant of the systematic and pervasive failures of the
modern college lending system... I don't think the system is totally to blame
for this one.

Four years of college AND working experience and you still can't make a basic
CBA for how you spend your time?

~~~
strikelaserclaw
I believe in personal responsibility as much as the next guy, but my
generation (i'm about 29) was heavily taught two things by our parents
1)Having a degree is better than not having a degree and 2) You should pursue
your interests and passions above all. I am thankful that i became interested
in computers at a young age and make a decent living but that guy could have
totally been me if i had been interested in something unemployable. Mental
models that we are taught about the world growing up have a huge influence on
our behaviors as we venture out into the real world. This guy might have
doubled down on his "follow your passions" by getting a unemployable masters
degree.

------
hnruss
As a software developer, my income has quadrupled since graduating with $25k
in student loans from a state college. It was totally worth it for me.

However, everyone should do the research to understand their career outlook
before going to college. If a profession had low wages, low growth, and/or low
demand, I’d be very wary of taking out any student loans to qualify.

People should also research what type of college they will need to graduate
from in order to achieve their most likely career outcomes. Paying
significantly more for private or out-of-state tuition probably won’t be worth
it, unless you know for a fact that it will be.

Finally, prospective students should critically evaluate their own ability to
achieve the grades necessary to graduate. My own degree required nothing more
than a C average, which I knew I could achieve.

~~~
thorwasdfasdf
There's strong demand for software engineers now. We can enjoy it while it
lasts. But, if you look at some of the latest dev surveys, you'll see there's
a ton of fresh talent entering the work force and it's only a matter of time
before they become mid-level and senior (5-10 years). At that point, the
supply of engineers will far exceed the demand and the same thing will happen
to engineers as any other white collar profession.

~~~
Tehchops
> But, if you look at some of the latest dev surveys, you'll see there's a ton
> of fresh talent entering the work force and it's only a matter of time
> before they become mid-level and senior (5-10 years). At that point, the
> supply of engineers will far exceed the demand and the same thing will
> happen to engineers as any other white collar profession.

While I don't disagree we could see a demand contraction, I think your
assertion is based on a tenuous premise at best: tenure == competency.

I've had the misfortune of working with many "senior" engineers who struggled
with basic technical concepts and even more basic reading comprehension.

The demand for _great_ engineers will _always_ be there. What the market
_will_ be flooded with is mediocre ones who have improved nothing _but_ their
title in the 5-10 years of their career

~~~
thorwasdfasdf
working in the bay area i've never met any software enginer like that, senior
or otherwise.

What cities/type of companies to you find "senior" engineers who struggle with
basic technical concepts?

~~~
Tehchops
The high-achieving SF market may be more likely to select against it.

IME it's much more common in 3rd-tier/mid-market tech companies, or even
higher-profile companies where tech isn't the primary operating vertical, and
locale != Bay Area.

Companies that can't compete on engineering culture or compensation are
naturally going to attract less talented engineers, and there will be a wider
variance of skill across the engineering org as a whole.

------
bensonn
He struggled to come up with the $300 a month he owed upon graduation... He
then went back to school to pursue a master’s degree in __comparative
literature __. He brought home $1700 per month and lived with his mother but
still couldn 't afford to pay off 20k.

He couldn't afford to live in the (expensive) city of Denver so he moved into
a concrete house in a jungle in India where some toilets are holes in the
ground you squat over and restaurants serve spoiled goat meat. He considers
his standard of living higher in India.

The above is 90% copy/pasted from the article, just shortened and summarized.

Maybe this sounds harsh but I don't think he will be missed. Writing off 20k
seems like a deal for the US, enjoy him India!

------
thorwasdfasdf
The thing is, there's plenty of blue collar waitress/waiter/cook style jobs.
Here in the bay area almost every cafe and restaurant has a now hiring sign.
But, white collar jobs that require degrees are exceedingly rare. amongst my
MBA friends (producers, managers, analysts, etc), their facing an unemployment
rate of over 30%!

What this indicates is a vast oversupply of workers with degrees. We've just
got too many people running around with degrees and not enough blue collar
workers.

~~~
egypturnash
“Here in the Bay Area”

Sweetheart, your area has its own special problems.

You might want to sit down with PadMapper or some other rental site and see
what’s available in the Bay Area for a price someone getting paid $11/h
(California’s minimum wage) can afford. Especially when you consider there’s a
general trend towards never giving anyone enough hours to qualify as full-
time.

~~~
thorwasdfasdf
Believe me I know. They'll never be able to fill those 11$/hour roles without
paying more. That's why local inflation is so high. Anything service related
becomes increasingly expensive (child care, plumbing, etc). Child care costs
1800$/mo around here vs 600$/mo in other big cities more affordable. the cost
of housing raises the eventual total COL

------
youeeeeeediot
Interesting article, yet not a single mention of what area of study and degree
each of those 3 examples received? That is a key piece of information, I
wonder why it was left out.

~~~
781
A previous version of the same story says:

\- one in philosophy

\- one in communications and history

[https://www.cnbc.com/2018/10/26/he-moved-to-a-jungle-in-
indi...](https://www.cnbc.com/2018/10/26/he-moved-to-a-jungle-in-india-to-
escape-his-student-debt--and-hes-not-alone-.html)

~~~
tylerdunkel
all of a sudden I am not as surprised

------
SQL2219
I recently toured a state university with my son. The rec center had a lazy
river, hot tubs, weight room, climbing wall, etc. It was all very new, and
looked very expensive.

------
musicale
If you have high student loan payments and low income, income-based repayment
is essential.

However, companies systematically (and probably illegally) direct borrowers
toward expensive deferment and capitalized interest rather than income-based
repayment.

Moreover, while traditional payment terms might offer a 30 to 90 day grace
period, student loan companies routinely declare a borrower "delinquent" for
being one day late, triggering aggressive collections actions as well as
credit damage, and or course vectoring borrowers into the aforementioned
deferment/capitalized interest.

And of course with income-based repayment you may very well be making student
loan payments for the rest of your life.

Though checking a student loan web site recently it did say that you _may_ be
eligible for loan relief if you have recently "become deceased."

Good to know.

------
lostmymind66
Not everyone needs to go to college and a student thinking about enrolling
really should look at the likelihood of being able to get a job that pays well
enough to pay off the student loan.

I know so many history, art, English, and various other liberal arts majors
that have $50k+ in debt and are still scraping by. They can't find a job,
can't pay off their debt, and are barely surviving.

College is an investment in your education. I don't think this is taught
enough in school.

The Federal loan system is also the problem. Universities get their money up-
front and don't care if the student can pay it back. They can continue to
increase 'administrative' costs and the students get stuck with the bills and
have virtually no risk.

The risk needs to be shifted to the University. Shitty, useless, majors would
be gone pretty quickly.

------
jorblumesea
> He struggled to come up with the $300 a month he owed upon graduation

Don't most loan providers have income based repayment plans? You can just tell
them "I can't afford this" and provide pay stubs. I think 15% of take home is
standard.

~~~
rayiner
The government, which owns 92% of outstanding student loan debt, has income-
based repayment. It's 10% of your income after subtracting 150% of the federal
poverty level.

------
RickJWagner
“Any rational person who learns that people are fleeing the country as a
result of their student loan debt will conclude that something has gone
horribly awry with this lending system,”

I agree. The current system is built to shovel money into ever-growing college
bureaucracies. Kids are being given loans without a fair chance to repay and
are being encouraged to live lives they can't sustain.

The whole thing needs a good reset. MOOCs might help.

One thing I strongly oppose: foisting the payoff onto the entire population
(taxpayers). That makes non-college people (who make very little) foot the
bill for this boondoggle.

------
HillaryBriss
Where's globalization when you really need it?

What if these US students could have earned an equally useful degree for one
quarter as much money by attending an accredited college in China, India,
Ukraine, Mexico, Russia, Ecuador, Thailand or some other nation where all the
costs are lower?

~~~
logicchains
They could have earned an equally useful degree for less than a quarter of the
price in some European country like Germany or Finland where university is
really cheap even for non-citizens.

------
boomboomsubban
I've seen several stories about this, and people usually become teachers in
other countries. I think many of them picked their degrees with an intention
of becoming a professor, only to find that job unobtainable.

So why are they unwilling to enter the US education system, which has been
suffering from a shortage of teachers for years. Are teachers in these other
countries better paid? Is the certification in the US that much harder? Or is
our public education system so shitty that virtually no one is willing to
return after high school?

~~~
Blackthorn
> Are teachers in these other countries better paid?

From having some family that were and are teachers here in the states, seems
like the answer is: yes.

There's also the general lack of respect that American society gives teachers.

------
business_s1
check out this high school district - finally a superintendent paving the way
for students not to fall into the college student loan fiasco:
[https://abc7chicago.com/education/high-school-program-
helps-...](https://abc7chicago.com/education/high-school-program-helps-
students-minimize-college-debt/5323587/)

------
anbop
Don’t know why we get excited about subsidizing the poor choices of the 40th
percentile income earner instead of the 5th percentile earner.

------
Blackthorn
Really, good for them. They recognized the problem in front of them and did
something to fix it.

The Bush administration that pushed making student loan debt not dischargeable
in bankruptcy has been absolutely ruinous.

------
purplezooey
_I have a higher standard of living in a Third World country than I would in
America, because of my student loans._

In a way, that's really sad, that we can't do better here.

~~~
tylerdunkel
I think most people do, do better. 3 cases of people getting very questionable
degrees and then running on their loan obligations does not make a trend.

------
business_s1
here's a great example of a school district doing something to help kids not
get into debt: [https://abc7chicago.com/education/high-school-program-
helps-...](https://abc7chicago.com/education/high-school-program-helps-
students-minimize-college-debt/5323587/)

what do you guys think?

------
spsrich2
How long until people with student loan debt are denied passports

~~~
musicale
Probably they are working on this already.

------
La-ang
400 dollars as a student repayment of the loan seems small, especially for a
single person with no family. There are people working delivery jobs and even
off books making way more than that money and yet, going to school in the
evening and buying cars and taking loans when necessary. I can tell from these
stories that these people hate the struggle, and although college graduates,
they never passed the school of hard knocks, as they gave up too easy on
America because they couldn't find a job in their city or field, but why not
move to another city or expand horizons? I understand if the loan was a
colossal 100k, but 30k is quite acceptable. Also some students go study in
China to avoid paying for college, so how come the thought never crossed their
mind, and working as an expat is a choice, not a last resort.

