Like many American nurses, I graduated with substantial student debt. The current average for those who get a BSN is nearly $24,000. Unfortunately, mine was nearly twice that much and my monthly payments were just over $400.
When the thought of moving abroad was just taking shape, the responsibility of my student loans weighed heavy on my mind.
I knew nurses in the UK earned less money, and I was still unsure of the difference in cost of living. Would I have enough money to get by?
I figured my best bet was to save up while I could and use those savings to continue to pay off the money I owed and to cover anything my new meager salary couldn’t.
Little did I know that only a year after living abroad my loan payments would go from $415 to $0.
Disclaimer: This is just information about my experience. Each person’s loans, taxes, and circumstances will be different. For loan or tax advice, consult a specialist.
My debt
All of my loans are government loans through a company called Great Lakes. For the longest time, my payment plan was set so that I would pay it all off in ten years. Sounds good, right? And while I was able to pay it working as a nurse in America, it was ok. The total came down steadily, I lived with my parents for a couple years so that what I wasn’t spending on rent could be saved or used to pay off these dreaded loans.
My first year abroad
I continued paying my minimum payment as it was for the first 8 months. My income had decreased. My savings were being used up more rapidly than I had hoped. Money was tight.
So I had to come up with a plan. I applied for what is called income based repayment. Or income driven repayment. Even though I was earning in pounds, I was able to write a letter to accompany my application which outlined my new salary in pounds, what the conversion rate was, and what that meant my salary was in dollars. I also had my line manager sign to confirm what I was saying.
That seemed to be enough for them and they used my new Adjusted Gross Income (AGI) to calculate my minimum payment. In the end it dropped by 75% to just $85.
I felt like I could finally breathe! Plus any extra that I did decide to pay could be put toward the higher interest loans… theoretically… because I never really wanted to pay any more than that.
The next year
After doing my taxes for the first time as an expat, something miraculous happened. I claimed Foreign Earned Income Exemption (one of the options for filing taxes as an expat). This ended up decreasing my AGI to $0 which meant that when I renewed my income based repayment plan my minimum payment dropped, too. To $0.
How it’s going
So far, the arrangement has been working. Though, I suppose my perception of this could have been affected by the pandemic and the subsequent freeze on interest and payments. That’s been helpful, definitely, but I am still wondering what my long-term plan is.
I don’t like the idea of having the debt hanging over my head. I always thought I would pay them off very swiftly, but now perhaps, my plan will be to have the loans forgiven and pay the income tax on what is left.
In any case, it has given me time to consider my options. I am now well established in the UK and I have a better understanding of my finances, which are certainly more stable than when I first moved over. I’m nearing indefinite leave to remain, which means I will have more options soon. And who knows? I may just win the lottery someday.
If you are an expat, what is your experience with student loans? Please do share in the comments.
Disclaimer: This is not financial advice – for more information read through the terms of use and privacy policy for using this website.
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