Can I default on my private student loans if I was an international student?
What are the consequences if I ignore the emails? If you ignore the emails they will try harder to collect the money from you until they give up. Unlike what some other people here say, defaulting on a loan is NOT a crime and is NOT the same as stealing. There is a large number of reasons that can make someone unable to pay off a loan. Lenders are aware of the risk associated with default; they will try to collect the debt but at the end of the day if you don't have money/assets there is not much they can do.   As far as immigration goes, there is nothing on a DS-160 form that asks you about bankruptcies or unpaid obligations. I doubt the consular officer will know of this situation, but it is possible. It is not grounds for visa ineligibility however, so you will be fine if everything else is fine. The only scenario in which unpaid student loans can come up relevant in immigration to the US is if and when you apply for US Citizenship. One of the requirements for Citizenship is having good moral character. Having a large amount of unpaid debt constitutes evidence of a poor moral character. But it is very unlikely you'd be denied Citizenship on grounds of that alone.  I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Yes, they probably already have.  How would this affect me if I visit America often? Does this mean I would not ever be able to live in America? No. See above. You will have a hard time borrowing again.  Will they know when I come to America and arrest me at the border or can they take away my passport? No. Unpaid debt is no grounds for inadmissibility, so even if the CBP agent knows of it he will not do anything. And again, unpaid debt is not a crime so you will not be arrested. You signed a contract to pay the loan.  You owe the money.   Stories of people being arrested over defaulted student loans are usually based in contempt of court warrants when the person failed to appear in court when the collection agency filed suit against them. Explore student loan forgiveness program. Research collections and bankruptcy and how to deal with collection agencies.  There are pitfalls in communicating with them which restart the clock on bad debt aging off the credit report, and which can be used to say that you agreed to pay a debt.  For instance, if you make any sort of payment on any debt, a case can be made that you have assumed the debt.  Once you are aware of the pitfalls, contact the collection agency (in writing) and dispute the debt.  Force them to prove that it is your debt.  Force them to prove that they have the right to collect it.  Force them to prove the amount.  Dispute the fairness of the amount.   Doubling your principal in 6 years is a bit flagrant.   So, work with the collectors, establish that the debt is valid and negotiate a settlement.  Or let it stay in default. Your credit report in the US is shot.  It will be a long time before the default ages off your report.  This is important if you try to open a bank account, rent an apartment, or get a job in the US.  These activities do not always require a credit report, but they often do.  You will not be able to borrow money or establish a credit card in the US. Here's a decent informational site regarding what they can do to collect the loan.  Pay special attention to Administrative Wage Garnishment.  They can likely hit you with that one.  You might be unreachable for a court summons, but AWG only requires that the collectors be able to confirm that you work for a company that is subject to US laws. Update:  I am informed that federally funded student loans are not available to international students.  AWG is only possible for debts to the federal government.  Private companies must go through the courts to force settlement of debt.  OP is safe from AWG. What are the consequences if I ignore the emails? That would depend on how much efforts the collection agency is ready to put in. I got a social security number when I took up on campus jobs at the school and I do have a credit score. Can they get a hold of this and report to the credit bureaus even though I don't live in America? Possibly yes, they may already be doing it. Will they know when I come to America and arrest me at the border or can they take away my passport? For this, they would have to file a civil case in the court and get an injunction to arrest you. Edit: Generally it is unlikely that the court may grant an arrest warrant, unless in specific cases. A lawyer advise would be more appropriate. End Edits It is possible that the visa would also get rejected as you would have to declare previous visits and credit history is not good.
As an international student, the tuition is sky high. Typically, most students take loans for Education and start paying it back once they get a job. If you have exhausted your OPT period and have not got H1B, your options are either to go for further education(Hint: Phd), you can hope to cover living expense by part-time on campus job. This will give you additional time to look for a job and try for H1B again! The hard and fast rule is to pay off high interest loans first, but each individual's situation is different so there are some things to consider. Student loan interest is tax deductible up to $2,500.  Will your student loan interest exceed $2,500 for the year?  If so I would try to pay down the student loan first to bring down the total interest for the year so that you get as much interest back as possible on your tax return.  Also, it may be beneficial to pay off the car first to close that account so that you are only left with the 1 loan.  Once you have the car loan payment out of the way you can dedicate that amount to paying off the student loan. I'm in almost the same situation as you.  I currently have a mortgage and car payment.  In 6 months my grace period will be over, and my student loan payments will start.  I have $100k in student loan debt.  So I will have a $1,100 mortgage payment, $1,100 student loan payment, and $700 car payment (car loan is 0%).  I don't want to have 3 loans active so I will pay off my car loan in a 2-3 months to get that out of the way.  Then I will pay down my student loan by paying $700 extra every month. Some have suggested you can put the money in the 401k then take a loan to pay off the student loan debt.  Some things to consider before doing that: Check your 401k plan first.  Some plans allow you to continue paying on a loan if you leave the company, some do not.  If you have to change jobs before you pay back the 401k loan, you may only have 90 days to completely pay the loan or the IRS will treat this as an early withdrawal, which means taxes and penalties.  If you don't have another job lined up, this is going to make things much worse since you will have lost your income and may owe even more to the government (depending on your state, it may be up to 50% of the remaining amount).  There are ways to work with some student debt loans to defer or adjust payments.  There is no such option with a 401k plan. This may change your taxes at the end of the year.  Most people can deduct student loan interest payments.  You cannot deduct interest paid to your 401k loan.  You are paying the interest to yourself though.   It may hurt your long term growth potential.  Currently loans on 401k loans are in the 4% range.  If you are able to make more than 4% inside of your 401k, you will be losing out on that growth since that money will only be earning the interest you pay back. It may limit flexibility for a few years.  When people fall on hard times, their 401k is their last resort.  Some plans have a limit on the number of loans you can have at one time.  You may need a loan or a withdrawal in the future.  Once you take the money out for a loan, you can't access it again.  See the first bullet about working with student loan vendors, they typically have ways to work with you under hard circumstances.  401k loans don't. Amortization schedule.  Many 401k loans can only be amortized for a max of 5 years, if you currently have 10 year loans, can you afford to pay the same debt back in 1/2 the time at a lower rate?  You will have to do the math. When considering debt other than student loans (such as credit cards), if you fall on hard times, you can always negotiate to reduce the amount you owe, or the debt can be discharged (with tax penalties of course).  They can't make you take money out.  Once it is out, it is fair game. Just to clarify, the above isn't saying you shouldn't do it under any circumstances, it is a few things you need to evaluate before making that choice.  The 401k is supposed to be used to help secure your financial future when you can't work.  The numbers may work out in the short term, but do they still work out in the long term?  Most credit cards require minimum payments high enough to pay back in 7-10 years, so does shortening that to 5 (or less) make up for the (probably early) years of compounding interest for your retirement?  I think others have addressed some of this so I won't do the math. I can tell you that I have a 401k loan, and when things got iffy at my job for, it was a very bad feeling to have that over my head because, unlike other debts, there isn't much you can do about it. I'm not sure the reasoning still holds though.  If you default on your student loan, your diploma doesn't get repossessed.  There's a signifiant moral hazard associated with student loans.  A mortgage on the other hand is around a very physical item.  Though I can still banks lobbying for better rules, that would be hugely in the consumers disadvantage. oh wow, nice to hear about your friend. and I guess I didn't make myself clear. What I meant was as I'm an international student, USA will allow me to work here for one year after I get my degree and then they'll send me back to my country. Anyway, I'll definitely take your advice into consideration. Someone else might be able to provide more details - but generally yes, of course.  International corporations can pursue debt collection across borders - whether or not they do is a matter of convenience rather than law.  My understanding is that a company's ability to report on your credit report is dependent on their membership in Equifax, USA etc. - so while most of your credit is country by country, international companies or companies with any relationship in other countries can follow you cross-border if they find out your new address and report the debt w/ that address.  Since virtually every major company has some American affiliate, I wouldn't hold my breath that you can escape it indefinitely ESPECIALLY since you don't already have the debt, and have the power to actually pay for the service that you're using.  Also - this is an incredibly scummy thing to do, and no matter how you dress it up as a financial decision it's just theft. Would you leave the country without paying your landlord? Without paying for groceries or other physical goods? Why is stealing from a telecom company any different? The interest accrues daily based on the amount you owe.  The less you owe the less the daily interest accrual.  The faster you pay it off the less you pay in the lifetime of the loan.  You are losing money if you bank money rather than applying it to the loan immediately.  Since student loans cannot be declared in bankruptcy and interest rates cannot be refinanced, or are nonnegotiable, then you should consider your student loan a priority in case your employment/income runs into problems. Simple rule for UK student loans. Never repay early. (http://www.moneysavingexpert.com/students/student-loans-repay) They are not real debt: only payable over threshold and wiped after 30 years (ish).  They do not appear as debt with Credit Agencies. If you have other debt, it is almost certainly at a higher rate or worse terms and should be paid off first If you don't have debt, then you can put the cash to better use: whether saving, mortgage deposit or avoiding worse debt in the future.