student loan default leaving US is emerging as a troubling trend as millions fall behind on payments, raising economic and policy concerns about debt, mobility, and financial stability.
A record number of student loan borrowers are falling into delinquency and default, and some are making the drastic decision to leave the United States and abandon their loans, according to reporting by The New York Times.
Amanda Lynn Tully spent her teenage years as a ward of the State of Colorado and believed a college degree would be her path to a better life.
But when she graduated in 2017 with a master’s degree in historic preservation from the University of Oregon, carrying $65,000 in federal student loans and no job offers in her field, she felt misled.
“I was never financially stable because I was never taught how to be financially stable,” Ms. Tully, 37, said.
Less than a year after graduating, she made a drastic decision: she moved to Prague, where she had previously completed an internship, and defaulted on her loans. She has not made a payment in more than seven years.
More than 40 million borrowers carry federal student debt, and a record number — 7.7 million — have defaulted on their loans, according to recently released data from the Education Department, as reported by The New York Times.
For some borrowers, moving abroad and putting distance between themselves and debt collectors can be tempting. In interviews cited by The New York Times, people who made this choice said they were motivated by relief from the psychological burden of student debt, along with the possibility of a higher quality of life, even on a lower salary, outside the United States. Many who left, including Ms. Tully, said they do not plan to return.
The number of borrowers who abandon their loans this way is unknown, but many have shared their experiences on forums like Reddit. Credit reporting agencies such as Experian, aware of the issue, advise borrowers living abroad to resist the temptation to stop making payments. Falling into delinquency or default can severely damage credit scores, increasing borrowing costs and making it harder to access credit.
Ms. Tully had been on an income-based repayment plan, which allows borrowers to have remaining debt forgiven after 20 years of qualifying payments. She had been paying $60 per month when she defaulted. While that amount may seem manageable to some, it still felt like a heavy burden to her.
“The payments weren’t even covering the interest, so it was frustrating,” she said.
Stanley Tate, a Baltimore lawyer who specializes in student debt, cautions against this approach. “Federal student loans are contractual debts,” he said, meaning the obligation to repay does not disappear, regardless of citizenship or residency. As noted in The New York Times, the foreign earned income exclusion can allow borrowers living abroad and earning less than $130,000 (for the 2025 tax year) to qualify for $0 monthly payments under an income-driven repayment plan, an option he recommends instead of defaulting.
But even affordable payment options have not stopped some borrowers — at home or abroad — from defaulting.
“The psychological weight of carrying debt is a widespread issue, even when it seems financially manageable,” Ms. Tully said. “It’s not always ‘I can’t afford it.’ Sometimes it’s ‘I felt like I had no choice but to go to college and take out loans, and now I’m stuck with this,’ and that can shape people’s lives in ways that feel deeply unfair and harmful.”
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