Job Discussion Forums

[USAMATHMAN]

Hello all,

Thanks for reading/responding to my post. I am currently in process interviewing for positions in Saudi and UAE. I am hoping to make the move sometime this summer if I receive a good enough offer.

My question......
(1) How did you go about paying off debt while you where teaching overseas?

(2) Did you pay off your debts in one lump sum or did you make smaller payments (i.e. 2K per month toward debt).

I have about $40K in student loans that I need to pay off before I return to the U.S.

Any advice would be great!!

[veiledsentiments]

With the internet these days, this sort of stuff is easy. I would set up automatic payments through my US bank account and then transfer my overseas income to my US account.

Many friends in various countries now can go online and transfer dollars. You will likely be charged at both ends.

VS

[nomad soul]

Ditto what VS suggested. I would add that you set up an account with a US credit union versus a bank because the overall fees are lower with credit unions.

As for paying off your student debt, if your loans were through private financial institutions and carry a high interest rate, then by all means, pay the things off as soon as possible. However, if they're federal loans via the Dept of Ed, then consolidating them to get the lowest interest rate possible would be a smart move in keeping your monthly payments low while you continue to save money on the side. This type of student loan debt is considered "good" debt over the long run. Either way, at least you're being responsible in ensuring your student loans get paid and that your credit record remains untarnished.

[fladude]

There is no such thing as good debt. Pay it off as soon as you can. If you have a low interest rate, that means you are paying the debt for 30 years (so you are still paying it in your 50's, 60's, 70's maybe...). And you will end up paying 150k or more on 40k debt. Not to mention that student loans can not be gotten rid of in bankruptcy so if you ever get sick or unemployed and can't work for awhile, you may end up in default and then all sorts of bad things happen. You do not have a right to more than one deferral and whether you actually get a second one or not is pretty random. So pay it off and never deal with them again. 40k isn't a lot of money and you should be able to pay it off in a few years.

Try banking with Charles Schwab as they generally have low or no fees for world wide ATMs and you can trade stock/bonds with the same account.

[nomad soul]

Fladude: I understand from your previous posts that student loans are a real sore spot for you and probably for other forum members too. Not surprising, defaults on student loans outnumber credit card default rates in the US.

I put quotation marks around the word good because educational debt is for the purpose of investing in one's future earning potential. But debt is debt (a four-letter word, by the way) and yes, student loan debt and child support obligations cannot be discharged in bankruptcy. It should be noted, however, that if the OP can pay off his loans while at the same time add significantly to his savings, then he should go for it. (The exception are those nasty, high-interest private student loans which should be paid off asap.) On the other hand, if he's putting most of his earnings toward paying off his low-interest, loan and not into saving for emergencies, retirement (unless provided by his overseas employer), and essential major purchases, then he's not helping himself get ahead financially.

We don't know the OP's salary because he's still in the job hunting process, but he'll need to find a balance between paying down his loans while at the same time, ensuring he has enough savings to live off of when he returns stateside and has to look for work. He'd then have the option of temporarily postponing his student loan payments via forebearance if he runs into financial difficulties. But I agree, it's best to get these pesky education debts off one's back once and for all.

[veiledsentiments]

Good advice nomad soul. I am one of those who hates debt too.

Depends on one's income, of course, but I'd probably do a half and half thing... make sure that I have at least 2 years of normal living expenses back home in savings for emergency and then get rid of the ed loans as quickly as I could.

VS

[USAMATHMAN]

Hey all,

Thanks for the responses. They were very helpful. As all of you mentioned in the earlier posts........my biggest issue was finding the balance between how much should go towards savings vs paying off debt.

My preference would be to pay off the loans asap. But as you all suggested, I definitely need to put away enough money for savings/emergencies.

Will keep you all up to date on progress with interviews/offers.

Thanks again!!!

[fladude]