Renounce Citizenship to Discharge Student Loans

[hereforinfo]

With subsidized student loans, the government pays the interest while you are in school. The amount of subsidized loans you can take annually is limited (around $3-5k per year for undergrad), so any amount above that cap is considered to be unsubsidized, and on that portion the interest continues to accrue and is added to the principal balance. It's misleading to say that all government backed loans won't accrue interest, because that's just not true. For most students, a large portion of their student loan debt is considered unsubsidized.

But I do have issue with taking yoga and basket weaving type classes indefinitely to get out of paying back the loans, while the taxpayers are stuck paying your interest. That's cheating the system and only makes it harder for people who legitimately need to borrow money for education.

[hereforinfo]

I have over $100,000 in student loans. All of them are subsidized stafford loans, meaning that the gov't will pay the interest when I am in school.

You may want to verify that. The lifetime cap on subsidized student loans is $65,000. Anything above that would be unsubsidized, so the interest is accumulating and being added to the principal.

http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp

"When you graduate with a graduate or professional degree, the maximum total debt allowed from Stafford Loans is $138,500. No more than $65,500 of this amount may be in subsidized loans. This maximum total graduate debt limit includes Stafford Loans received for undergraduate study. "

[MSbklawyer]

It's never going to go away. At some point you can't take classes any longer. What do you do then?

Move to Canada and file for bankruptcy up there.

[backtoschool]

You may want to verify that. The lifetime cap on subsidized student loans is $65,000. Anything above that would be unsubsidized, so the interest is accumulating and being added to the principal.

http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp

"When you graduate with a graduate or professional degree, the maximum total debt allowed from Stafford Loans is $138,500. No more than $65,500 of this amount may be in subsidized loans. This maximum total graduate debt limit includes Stafford Loans received for undergraduate study. "

I have always been on scholarship or fellowship, so my loans were for living expenses both for undergrad school and grad school.

My undergrad loans were perkins loans and subsidized stafford loans.

My grad school loans were subsidized stafford loans.

The loan amount is so much because I had a 25% fee added on for default years ago before I consolidated them, and since they forgot some of the loans in the consolidation, the fee was applied twice.

And why would I care if my loans will always "be there"? I will defer them until I die.

Anyway, I am switching careers to public service, where the government will forgive them after ten years.

[hereforinfo]

I have always been on scholarship or fellowship, so my loans were for living expenses both for undergrad school and grad school.

My undergrad loans were perkins loans and subsidized stafford loans.

My grad school loans were subsidized stafford loans.

The loan amount is so much because I had a 25% fee added on for default years ago before I consolidated them, and since they forgot some of the loans in the consolidation, the fee was applied twice.

And why would I care if my loans will always "be there"? I will defer them until I die.

Anyway, I am switching careers to public service, where the government will forgive them after ten years.

Yes, but you will still have to make 120 payments while employed in public service for that length of time. You will end up paying back most or all of what you borrowed, minus a lot of the interest.

And most people cannot defer until they die. At some point your health or family situation just won't be conducive to taking classes. The burden of having to enroll in classes and go through that charade for the next 50 years is much worse than the thought of paying back the loans. There are only so many yoga classes you can take. You will eventually run out of the mindless classes and have to start taking hard ones. The 6+ hours of classes per week plus several more hours to study and complete assignments is a lot harder to me than spending that time working another job and paying on the loan. You are also limited to evening classes so eventually your options will run out and then it may have to interfere with your day job.

While it may be feasible to delay the loans for a few years, it's really a dumb plan long term if you're not working toward a degree and profession.

Believe me, I am sympathetic to the hopeless student loan plight. I originally borrowed a total of about $50k for undergrad, half of it subsidized. Since the rest accrued interest the balance had already grown beyond that when I graduated, at which time I consolidated and was put on a graduated payment plan. My monthly payment didn't even cover the monthly interest so the rest was being added to the principal. Within 5 years of graduating, my balance was up to nearly $75k because of the capitalized interest! When I got married we started paying extra and chipping away at the principal and struggled to pay them off finally. What a relief to get rid of that burden, which was like a noose around my neck from the time I got my first loan until payoff 17 years later.

I do think it's terrible that lenders are able to charge ridiculous rates on the government backed loans. They should only be able to charge 1% since they are guaranteed to get their money. My loans were at 8% at the time I paid them off. What a ripoff to the students and the government for the subsidized portion.

[backtoschool]

Yes, but you will still have to make 120 payments while employed in public service for that length of time. You will end up paying back most or all of what you borrowed, minus a lot of the interest.

And most people cannot defer until they die. At some point your health or family situation just won't be conducive to taking classes. The burden of having to enroll in classes and go through that charade for the next 50 years is much worse than the thought of paying back the loans. There are only so many yoga classes you can take. You will eventually run out of the mindless classes and have to start taking hard ones. The 6+ hours of classes per week plus several more hours to study and complete assignments is a lot harder to me than spending that time working another job and paying on the loan. You are also limited to evening classes so eventually your options will run out and then it may have to interfere with your day job.

While it may be feasible to delay the loans for a few years, it's really a dumb plan long term if you're not working toward a degree and profession.

Believe me, I am sympathetic to the hopeless student loan plight. I originally borrowed a total of about $50k for undergrad, half of it subsidized. Since the rest accrued interest the balance had already grown beyond that when I graduated, at which time I consolidated and was put on a graduated payment plan. My monthly payment didn't even cover the monthly interest so the rest was being added to the principal. Within 5 years of graduating, my balance was up to nearly $75k because of the capitalized interest! When I got married we started paying extra and chipping away at the principal and struggled to pay them off finally. What a relief to get rid of that burden, which was like a noose around my neck from the time I got my first loan until payoff 17 years later.

I do think it's terrible that lenders are able to charge ridiculous rates on the government backed loans. They should only be able to charge 1% since they are guaranteed to get their money. My loans were at 8% at the time I paid them off. What a ripoff to the students and the government for the subsidized portion.

I understand where you are coming from hereforinfo, and my case is a specialized one, in that I love school, have many interests that I can study on the side, such as video editing, or yoga, or photography, etc, and had unbelievable student loan payments when I was working.

My income is going to be a lot less when I am done with my second graduate degree, so the new income contingent plan for payback through direct loans will keep my payments manageable and I won't have to do this. But when I was making $175k a year, I needed other options other than forbearance.

Some people like taking enrichment classes, and would like them even better if they were a way of keeping their student loan payments manageable. You may think my plan is "dumb" (again, why the judgmental tone?), but I think in certain circumstances, it is a very realistic plan. Also, who are you to judge what classes people take? You think taking art classes is "cheating the system". If I had an accounting fetish and took accounting classes indefinitely would that still be "cheating the system"?

Just like my situation is not for everyone, neither is yours hereforinfo. Not everyone can take on a second job, grit their teeth and struggle to pay back their student loans. The original poster is so overwhelmed by his/her student loan burden that he/she wants to renounce his/her citizenship and flee the country!

I am just trying to provide realistic alternatives.

[OhioFiler]

I understand where you are coming from hereforinfo, and my case is a specialized one, in that I love school, have many interests that I can study on the side, such as video editing, or yoga, or photography, etc, and had unbelievable student loan payments when I was working.

My income is going to be a lot less when I am done with my second graduate degree, so the new income contingent plan for payback through direct loans will keep my payments manageable and I won't have to do this. But when I was making $175k a year, I needed other options other than forbearance.

Some people like taking enrichment classes, and would like them even better if they were a way of keeping their student loan payments manageable. You may think my plan is "dumb" (again, why the judgmental tone?), but I think in certain circumstances, it is a very realistic plan.

Just like my situation is not for everyone, neither is yours hereforinfo. Not everyone can take on a second job, grit their teeth and struggle to pay back their student loans. The original poster was is so overwhelmed by his/her student loan burden that he/she wants to renounce his/her citizenship and flee the country!

I am just trying to provide realistic alternatives.

I think it's a brilliant plan and proof of how thinking outside the box is what makes so few the real leaders in this country.

[adviceplease]

One of the colleges I looked into for my RN requires a PE class, and yes you can take yoga or aerobics, so if the school requires it as a pre-req to a program then it must be legitimate to take classes of that nature.

I have to wait until April to apply for my program and I am taking a psychology and a nutrition class that will go well with my RN. I am using financial aid to do so and I do not see a problem with taking extra classes that have an intrest to you. I will continue on in college to get at least a Masters degree so I can teach nursing later in life, if it keeps the loan repayments away for another 5+ years then it is a plus in my book.

[hereforinfo]

No one is ragging on people for taking classes that interest them or are working toward a degree. It's the concept of taking 2 classes per semester for the rest of your life solely for the purpose of deferring student loans until you die that is a bad idea.

Backtoschool advised: "why not just take a couple of online classes or classes at a community college every semester into perpetuity? You only need six credit hours to be a half time student and get a deferment where the government will pay the interest on your loans. You could postpone paying on your loans indefinitely by taking two classes at a community college or an online college every semester. The cost would come to under $100 a month."

Like I said above, not all student loan debt is subsidized. For undergrad, the cap is $23k total - so any amount above that does accrue interest. At some point it won't be feasible to take classes and when you stop that debt will be there and will have grown to an outrageous amount. It's also unethical to expect the taxpayers to pay the interest on someone's student loans for the next 50 years!

[backtoschool]

No one is ragging on people for taking classes that interest them or are working toward a degree. It's the concept of taking 2 classes per semester for the rest of your life solely for the purpose of deferring student loans until you die that is a bad idea.

Backtoschool advised: "why not just take a couple of online classes or classes at a community college every semester into perpetuity? You only need six credit hours to be a half time student and get a deferment where the government will pay the interest on your loans. You could postpone paying on your loans indefinitely by taking two classes at a community college or an online college every semester. The cost would come to under $100 a month."

Like I said above, not all student loan debt is subsidized. For undergrad, the cap is $23k total - so any amount above that does accrue interest. At some point it won't be feasible to take classes and when you stop that debt will be there and will have grown to an outrageous amount. It's also unethical to expect the taxpayers to pay the interest on someone's student loans for the next 50 years!

One could say that it is unethical to judge members on a bankruptcy forum.

When you took a second job to pay off your loans was it as a student loan collector perchance?

Just curious....

In any case, I am not understanding why you feel you are in a position to decide what's right and wrong. If you want to participate in a discussion about the virtues of paying off your debt, then go to a bill collector's forum and have a love fest.

There are other legitimate ways to approach a problem besides your own narrow, judgmental way hereforinfo. I have NEVER been called unethical in my life and I deeply resent you doing so on this forum.

If you read the posts of others on this thread, there are those who do not think my idea was a bad idea, in fact my idea was called "ingenious" and "brilliant" by other posters to this thread. You seem to be the only one whose underwear is in a knot over my idea.

[hereforinfo]

One could say that it is unethical to judge members on a bankruptcy forum.

When you took a second job to pay off your loans was it as a student loan collector perchance?

Just curious....

In any case, I am not understanding why you feel you are in a position to decide what's right and wrong. If you want to participate in a discussion about the virtues of paying off your debt, then go to a bill collector's forum and have a love fest.

There are other legitimate ways to approach a problem besides your own narrow, judgmental way hereforinfo. I have NEVER been called unethical in my life and I deeply resent you doing so on this forum.

If you read the posts of others on this thread, there are those who do not think my idea was a bad idea, in fact my idea was called "ingenious" and "brilliant" by other posters to this thread. You seem to be the only one whose underwear is in a knot over my idea.

I didn't call you unethical, what you are doing is may be the wise thing to do in your situation. I don't know, nor do I care. For the 100th time, what I think is unethical and isn't prudent is to PLAN TO TAKE CLASSES FOR THE REST OF YOUR LIFE SOLELY TO DEFER STUDENT LOANS. Again, I am not saying that is what YOU are doing. I'm speaking about anyone who thinks they can do that. It's not realistic or sustainable forever, and not only does it cost money but it in most circumstances the interest accrues and the loan amount becomes astronomical, so that when the person can no longer take classes the debt could be 10 times what it was to begin with and because you can not get rid of the debt the person's life could be ruined by that debt. People think that is brilliant? Umm, ok. I also think that someone (NOT YOU) trying to postpone repayment until they die while the taxpayer foots the bill is unethical and cheating the system. Let me say it again since you obviously don't get it. I AM NOT TALKING ABOUT YOU OR WHAT YOU ARE DOING.

I think it's funny how just because I disagree with your advice and point out why it won't work, I must be a student loan collector and am unethical and judgmental.

[backtoschool]

I didn't call you unethical, what you are doing is may be the wise thing to do in your situation. For the 100th time, what I think is unethical and isn't prudent is to PLAN TO TAKE CLASSES FOR THE REST OF YOUR LIFE SOLELY TO DEFER STUDENT LOANS. Again, I am not saying that is what YOU are doing. I'm speaking about anyone who thinks they can do that. It's not realistic or sustainable forever, and not only does it cost money but it in most circumstances the interest accrues and the loan amount becomes astronomical, so that when the person can no longer take classes the debt could be 10 times what it was to begin with and because you can not get rid of the debt the person's life could be ruined. People think that is brilliant? Umm, ok. I also think that someone (NOT YOU) trying to postpone repayment until they die while the taxpayer foots the bill is unethical and cheating the system. Let me say it again since you obviously don't get it. I AM NOT TALKING ABOUT YOU OR WHAT YOU ARE DOING.

Yet you are quoting me and what I am doing when you use the word "unethical". But I am not a hair spitter, I will call this a truce.

Look, I think you mean well on some level hereforinfo, but your way of doing things is not the only right way. This post was originated by a poster that was so desperate, they were willing to renounce their citizenship to deal with their student loans. I was just providing another alternative. It may not be the one that you chose when you were faced with your student loans, but this is a free country and we are all entitled to make our own choices. There is not only one "ethical" choice.

In any case, let's PLEASE move on from this sidebar conversation. You have made it abundantly clear that you do not approve of my suggestion. Your point is noted. Let's let readers of this thread make up their own minds and make their own decisions about their own lives.

[backtoschool]

I didn't call you unethical, what you are doing is may be the wise thing to do in your situation. I don't know, nor do I care. For the 100th time, what I think is unethical and isn't prudent is to PLAN TO TAKE CLASSES FOR THE REST OF YOUR LIFE SOLELY TO DEFER STUDENT LOANS. Again, I am not saying that is what YOU are doing. I'm speaking about anyone who thinks they can do that. It's not realistic or sustainable forever, and not only does it cost money but it in most circumstances the interest accrues and the loan amount becomes astronomical, so that when the person can no longer take classes the debt could be 10 times what it was to begin with and because you can not get rid of the debt the person's life could be ruined by that debt. People think that is brilliant? Umm, ok. I also think that someone (NOT YOU) trying to postpone repayment until they die while the taxpayer foots the bill is unethical and cheating the system. Let me say it again since you obviously don't get it. I AM NOT TALKING ABOUT YOU OR WHAT YOU ARE DOING.

I think it's funny how just because I disagree with your advice and point out why it won't work, I must be a student loan collector and am unethical and judgmental.

You use the words "bad", "unethical", "wrong", "shouldn't" a LOT in ALL your posts, not just this one. Those are judgmental words. They are coming from you. I am merely quoting them.

[hereforinfo]

Look, I think you mean well on some level hereforinfo, but your way of doing things is not the only right way. This post was originated by a poster that was so desperate, they were willing to renounce their citizenship to deal with their student loans. I was just providing another alternative.

And all I did was point out why the alternative may not work and could make the situation a million times worse, and that in some ways it could be unethical in my opinion. Nowhere did I say people should just get a second job to pay the loans. I said that if they have the time and energy to expend on taking classes they may not necessarily be interested in, wouldn't it just make more sense to take on a second job instead? Especially when taking the classes costs money and the loans will still be there when the person can no longer do that. If one has to take 4 classes a year for the rest of their life, there aren't enough classes. So eventually they have to stop. And then what?

[backtoschool]

And all I did was point out why the alternative may not work and could make the situation a million times worse, and that in some ways it could be unethical in my opinion. Nowhere did I say people should just get a second job to pay the loans. I said that if they have the time and energy to expend on taking classes they may not necessarily be interested in, wouldn't it just make more sense to take on a second job instead? Especially when taking the classes costs money and the loans will still be there when the person can no longer do that. If one has to take 4 classes a year for the rest of their life, there aren't enough classes. So eventually they have to stop. And then what?

Yes, you have made this point numerous times on this thread. I get it. I simply don't agree. Let's agree to disagree and move on.