[JerCastle]

Heard of someone living overseas who was about to take 2nd citizenship and surrender his US citizenship, yet this person still owes student loans. Would the federal government allow it or would they refuse until the student loans are paid off?

[Rainbow Crow]

The system doesn't allow people to just avoid debts or taxes like this, though realistically speaking, if he is determined to fall off the grid they can't stop him.

[Godstud]

Sounds like a great way to get out of student loans! Power to him for figuring it out! They'll patch that loophole soon enough.

[Rainbow Crow]

No they won't... if someone just disappears into a foreign country and has no assets to freeze they can't really do anything about it.

[Godstud]

I suppose that's true until time as they return or if they have relatives in the country which they might pass of his debts to. They might make it so student loans all need a cosigner.

[Quantum]

If I were an American student, I would leave America and move to Latin America or some other place after graduation, where the lower skill level means that your skills will be in higher demand, the cost of living is cheaper and more opportunities for more educated people. America will only become worse in the future whilst many developing countries have improved in some form or another.

[SpecialOlympian]

You're still going to have a bunch of bad credit lines on your Equifax, Transunion, and Experian credit reports.

Anyone with a college degree and student loan debt significant enough to try and ditch it by leaving their home country will probably be hampered by a poor credit score. It's not uncommon for employers to check, and having $50,000 of delinquent debt on your credit profile will prevent you from obtaining a business loan.

Edit: Lol I just looked up Equifax online to see how far their reach extends. They apparently have a history of editing their own Wikipedia page on a frequent basis, and Wikipedia calls them out on it in the criticism section.

[Godstud]

You're still going to have a bunch of bad credit lines on your Equifax, Transunion, and Experian credit reports.

Most other 'developing' countries don't give a rat's ass what your credit there is. You can often get away with phoney documentation, and as pointed out, can often get by quite swimmingly with whatever education you got in the US/Canada. I'd recommend doing this to many potential graduates with overwhelming student loans.

[Rainbow Crow]

Debts generally aren't inheritable.

Lots of countries don't extend much credit to begin with. The US is kind of credit crazy, really.

[Godstud]

Yeah, I once had $3000 owing to the gov't and I thought I was in real financial trouble until I met someone with a $50,000 debt and I felt immediately better!

As long as you continue your card payments, you can carry a huge debtload.

How would Visa/Mastercard deal with this? Any ideas?

[SpecialOlympian]

Probably close your card and sell off your debt for %10 on the dollar.

[JerCastle]

Well, snarky comments aside, when I heard this, I immediately began to research giving up citizenship. I'm not just talking about disappearing into a foreign country, but actually going through the formal procedure of surrendering citizenship. Apparently you must go to the US Embassy in the country you are living in, and go through a certain procedure. And if you owe taxes, they won't let you renounce. I assume this would include student loans?

Really, I think this guy is crazy to to think the US Embassy would just say, "Oh, you want to give surrender your US citizenship and you owe $70,000 in student loans. Sure, go ahead!" I think they would say no and I hope they do.

Here is a link that documents the procedure from the US Embassy in London.

http://london.usembassy.gov/cons_new/ac ... ation.html

[Rei Murasame]

You'd have to make sure that you don't end up being left stateless, so you'd need to acquire citizenship in your destination country before going through the renunciation process to give up your American nationality.

It should be possible to leave the USA that way, and show them the middle finger.

[SpecialOlympian]

Hey Castle you've gotten away with it for a few days, but you need to pick a colorless avatar of a person.

Notice everyone here has a person and it's in grayscale. Mine is renowned economist/bodybuilder Ludwig Von Muscles.

[JerCastle]

Hey Castle you've gotten away with it for a few days, but you need to pick a colorless avatar of a person.

Notice everyone here has a person and it's in grayscale. Mine is renowned economist/bodybuilder Ludwig Von Muscles.

Good point. I'll see what I can find.

[Someone5]

Well, snarky comments aside, when I heard this, I immediately began to research giving up citizenship. I'm not just talking about disappearing into a foreign country, but actually going through the formal procedure of surrendering citizenship. Apparently you must go to the US Embassy in the country you are living in, and go through a certain procedure. And if you owe taxes, they won't let you renounce. I assume this would include student loans?

Actually... depending on the timing that might not actually pose a problem. If you were current on payments for your loan, you wouldn't owe anything in taxes relating to it.

Really, I think this guy is crazy to to think the US Embassy would just say, "Oh, you want to give surrender your US citizenship and you owe $70,000 in student loans. Sure, go ahead!" I think they would say no and I hope they do.

They don't really have any discretion in the matter; and moreover why would some foreign service agent give a rat's ass about you ducking your student loans? It's not like they're all robots.

[KlassWar]

You'd have to make sure that you don't end up being left stateless, so you'd need to acquire citizenship in your destination country before going through the renunciation process to give up your American nationality.

It should be possible to leave the USA that way, and show them the middle finger.

You simply can't renounce citizenship unless you've acquired a different one, 'cause of them UN conventions on the prevention of statelessness pretty much every first world country got signed.

[JerCastle]

You simply can't renounce citizenship unless you've acquired a different one, 'cause of them UN conventions on the prevention of statelessness pretty much every first world country got signed.[/quote]

Please read the original question, you will see the question is based on the fact that 2nd citizenship will be acquired first.

[T Alfred]

On the plus side, this is the federal government we're talking about. The left hand has no idea what the right hand is doing. Most student loans have been sourced out to private companies, even if guaranteed by the Fed (or they had been for a period, depending on the age of your loans). So, the tax issue shouldn't hold you back from your expatriation, provided that during your exit interview, you don't say, "Oh, I'm doing this because I don't want to pay my student loans."

On the neutral side, you won't be able to acquire citizenship of another state without renouncing your U.S. citizenship. That, however, might be a way to get the expatriation without an exit interview (there is more than one way to renounce your citizenship).

And on the negative side, although the Latin American country argument sounds lovely, there is that whole kidnapping, murder, and death thing that some of the groups living down there like to use on foreigners - and they don't particularly check on your citizenship status.

[Typhoon]

Relatives went as far away as Australia and they are still paying it off. Thankfully my paid education finished before the rates went up so I managed to pay off my debt reasonably easily as it was not that much, these days it may be just shy of £30,000 for a home student and that's without living expenses! Makes you wonder if it is worth it, in some cases probably not.

Which is good because no one escapes student loans!
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