Student Debt Burdened Them, So They Moved Abroad and Stopped Paying
Rising U.S. student debt and the inability to discharge most loans in bankruptcy are pushing some borrowers to move abroad and stop paying, prompting sharp disagreement over whether this is savvy self‑defense or simple theft. Commenters contrast how easily corporations shed obligations via bankruptcy with the lifetime burden on individuals, debate the morality of strategic default, and highlight how high interest rates, opaque income‑based repayment, disability gaps, and aggressive collections shape borrowers’ choices. Comparisons with countries like the Netherlands, as well as calls to make universities or lenders bear more risk, underscore broader questions about how higher education should be financed.
Corporate vs. Personal Debt & Bankruptcy
- Many compare student debt to corporate borrowing: companies routinely walk away via bankruptcy when it’s rational.
- Key distinction raised: most debts can be discharged through bankruptcy after assets are liquidated; U.S. student loans generally cannot, so people instead flee or default informally.
- Some argue this asymmetry is deliberate to promote entrepreneurship but not “human thriving”; others say it prevents mass post‑graduation bankruptcies by asset‑poor young borrowers.
Morality of Defaulting / Moving Abroad
- One camp sees refusing to pay when able as straightforwardly immoral: breaking a deal after receiving value.
- Others frame payment as a business decision, not a moral one, especially when lenders and schools knowingly issue high‑risk, federally backed loans.
- Some explicitly justify “consumer equivalents” of corporate games (strategic bankruptcies, tax arbitrage), citing an illegitimate or unfair system.
- A minority goes further, calling debt largely a social construct used to control younger generations.
Loan Structure, Risk, and Interest Rates
- Several note U.S. student loans are very low‑risk to lenders (federal guarantees, bankruptcy protections) yet carry relatively high interest.
- Debate arises about why private lenders don’t undercut federal rates; responses cite capital requirements, risk, and barriers to entry.
International Comparisons and Enforcement
- Dutch system: low interest, income‑based repayments, long-term forgiveness; some still emigrate over relatively small monthly payments.
- The Netherlands can block passport renewals for significant arrears; some call this a human rights violation, others see it as limited leverage.
- In the U.S., student debt is likened to a quasi‑tax for education, also largely non‑dischargeable; similar passport blocks exist for some other debts (e.g., child support).
Education Choices & Personal Responsibility
- Several criticize choosing expensive out‑of‑state or private programs, especially in low‑ROI fields, as poor judgment.
- Others push back against “only STEM/tech is acceptable,” arguing for broader educational value but at more reasonable in‑state/community‑college costs.
Psychological and Practical Burdens
- Some are baffled by defaults on seemingly small income‑based payments; others highlight constant servicer harassment, paperwork games, and policy instability.
- Personal anecdotes describe disability, healthcare traps, and changing federal rules eroding trust that government will honor promised relief.
System Design & Proposed Fixes
- Suggestions include allowing student loans in bankruptcy, shifting losses to universities, and fundamentally restructuring or socializing higher‑ed funding.
- Some argue the current debt‑driven model is functioning as intended: binding workers to the system via education and healthcare costs.