Repaying U.S. Federal Student Loans while living in Japan

[Adhesive]

So, who here has experience making student loan payments in the U.S. while living abroad?

Now that there is income-based repayment plans and debt forgiveness for federal loans, I'm wondering how difficult is it to provide your lender with all the required income information, and also how people go about making sure their payments are made. What type of expenses am I looking at if I had to convert a portion of my Japanese salary into USD every month and send in a check...or wire it to my U.S. account where they could do an automatic withdrawal?

If anyone has experience with this I'd love a little insight.

[Mike Oxlong]

Can't you have the loan payments set up to come from your home bank account automatically, and periodically transfer money from Japan to your home account via postal money order or GoLloyds?

[kino]

I use the US Department of Education's loan tracking and repayment service:

http://www.dlssonline.com/

[IkemenTommy]

I wonder what would happen if you don't pay. Can they still come after you?

[Adhesive]

Thanks, any idea on providing financial information for them to base the monthly payments?

[Kuang_Grade]

Thanks, any idea on providing financial information for them to base the monthly payments?

its not 100% clear about what documentation they want but if you follow the links from this page
https://www.dl.ed.gov/borrower/QCNews.do

you should get closer to the answer.

Also, the federal loan program has gone through alot of changes over the years, so what was the case 10, 5 or even 2 years ago may not be the case today. Also, there are various loans from various parties (fed, private, fed subsidized private, ect), so the rules and regs depend on which type of loan you have and with whom...so be sure you know all that stuff cold before you tackle the bigger stuff.

[adamukun]

I have experience paying off both a private (Citibank) and a federal (Federal Direct) loan in Japan. The Citi loan is all paid off now and I have just one payment left on the Federal loan, so as of this writing my info is current.

I kept an account open in the US that I used to wire money from Japan. Thankfully the exchange rate has been very favorable over the past two or so years. At first I used Shinsei Bank's international wire service, but eventually switched to GoLloyds when I learned it was half price.

My payment plan for the Federal loans was graduated and not based on income, so I don't know about your situation with proving income. If you have the means I would recommend paying the loans off asap. You will probably have to call or check the government's website to find out about paying off the loans while you work abroad.

[Adhesive]

If you have the means I would recommend paying the loans off asap. You will probably have to call or check the government's website to find out about paying off the loans while you work abroad.

I'd love to repay my loans as soon as possible, I hate being in debt and having this huge cloud hanging over my head. In fact, I have never borrowed through credit cards, car loans, etc. However, I have nearly $200k in federal student loan debt (Four Years of University + Three Years of Law School in California + No Parental Support = Ass Rape) and paying it off quickly seems to be a fantasy at this point.

That being said, the only reason I'm willing to pay the minimum income-based payments is because the government now forgives your debt after 25 years of income-based repayment (10 if you work in the public sector) which means that even if you make interest-only payments for 25 years you will still end up paying only a fraction of the original principal. Sounds good to me.

[Samurai_Jerk]

That being said, the only reason I'm willing to pay the minimum income-based payments is because the government now forgives your debt after 25 years of income-based repayment (10 if you work in the public sector) which means that even if you make interest-only payments for 25 years you will still end up paying only a fraction of the original principal. Sounds good to me.

If you can get that deal, there's no reason to try to pay your loans off ASAP.

Anyway, as far as making payments from Japan, I do what's already been suggested. Have payments set up to withdraw from my US account automatically and use Lloyd's to wire money home occasionally.

[Kuang_Grade]

That might work, but you're likely to have a low credit score for that period of time carrying that debt load with a small income.

I don't know if I would bank on 100% principle forgiveness...while some forms of this have been around for a while, I believe they required that borrower make at least some attempt at paying some part of the principle (even after 10 years, I believe the graduated program would should start getting into a chunk of principle paydown). Now combined with this income based business, I can see some folks objecting that this is too much of a free ride, esp facing the deficits the US is facing now. (ie, some blogger who works for ACORN says he's looking forward to using this program to stiff the government and then Fox news picks it up). Now they might not take it away, but I could see something like a claw back of the tax deduction on student loan interest on any forgiven loan or a maximum cap on what can be forgiven.....Looking at the gov's website, there's alot of "could be forgiven' or 'may be eligible for forgiveness' type langauge. And while they are unlikely to fiddle with any existing applications, that doesn't mean they can't change the deal for new applications down the line. The federal loan program has had alot two steps forward/two years later one step back sort of shifts over the last decade.

[Billy]

Why do people send money to their country any other way besides wire transfer? I don't get it. I pay 1% commission on the wire transfer which seems cheap enough. Am I missing something here?

[wuchan]

Why do people send money to their country any other way besides wire transfer? I don't get it. I pay 1% commission on the wire transfer which seems cheap enough. Am I missing something here?

YES. 1% plus exchange and bank fees, which equals about 10% in most cases.

There are ways around the fees. (BOA is the worst)
You can carry up to $10,000 in cash across the border and deposit it into your US account. 0% cost. You do need good bank connections here to get a good price on USD. My last purchase ran me about 0.5%.

Billy
tune-in-tokyo?

hipster DA!!!!! The first thing I see on your blog is a fuckin fixie.

[Billy]

I guess it depends on the amount you wire. Send a nice chunk of change and the fees don't add up to so much. I think I get charged 4,500 JPY for international wire. No biggie when sending $20K. Sending a couple hundred bucks and I can see you point.

hipster DA!!!!! The first thing I see on your blog is a fuckin fixie.

You got a fixie? So much fun to ride!

[IkemenTommy]

YES. 1% plus exchange and bank fees, which equals about 10% in most cases.

There are ways around the fees. (BOA is the worst)
You can carry up to $10,000 in cash across the border and deposit it into your US account. 0% cost. You do need good bank connections here to get a good price on USD. My last purchase ran me about 0.5%.


hipster DA!!!!! The first thing I see on your blog is a fuckin fixie.

Sounds like you can pay someone to "hand-carry" it for you (on business class) and still get some change left. Oh wait, maybe that is not a good idea...