When you move to a new country, you’ll still owe federal student loans. But there are steps you can take to lower the amount of your monthly payment to $0 and, ultimately, get your loans forgiven.
What to do for your federal student loans:
Keep a US bank account
Keep a mailing address in the US
File a federal tax return
Submit an income-driven repayment plan to your loan servicer
Complete the annual recertification of your income and family size
You’re eligible for income-driven repayment plan forgiveness after 20 to 25 years if you follow these steps.
This process works for two reasons. First, the federal government allows borrowers to have an affordable payment based on their discretionary income. Second, US citizens who move to a new country can exclude $100 thousand in income earned abroad from their US tax return using the Foreign Earned Income Tax Exclusion.
Those two rules combine to allow borrowers who live abroad and earn less than $100 thousand annually to have a $0 monthly payment.
How can I pay my student loans if I don’t have a US bank account or address? If you don’t have a checking or savings account from a US bank or an address in the states, you can use a third-party service to get a domestic mailing address. Many of those services will forward your mail to a foreign address. That way, after you apply for a checking account, your debit card will be sent to you abroad.
Related: How to Pay US Student Loans from Overseas