Job Discussion Forums

[jm21]

I was just checking out some different repayment options for student loans, and at least through Nelnet they say that effective July 1, 2009 you can put your loans on an income-sensitive plan and if you are unable to repay them by 25 years the remaining balance is forgiven. It seems like with just about any EFL job your loan payments would be next to nothing, and then 25 years later gone? It seems like a pretty amazing deal for someone interested in teaching abroad as a career...anyone know if it's as good as it sounds?

the one thing that has always worried me about teaching in China is the student loans taking a huge portion of my paycheck, but sounds like there might be a solution now. Wonder if there are special rules for those working abroad though.

[The Ever-changing Cleric]

[jm21]

I'm able to pay my student loans in America but it would be a PITA in China if I had to make full payments. It's been my biggest concern. It's interesting to hear that now there is a possible solution and I thought I'd try to confirm it and let others know about the information. I had thought about teaching in China long before learning about this new program. I just think it might make teaching in China far more accessible to those of us with significant student debt.

On a side-note, I think abundant student loans have been a major factor in the exponential increases in tuition we've seen, and have mired countless graduates in a large debt that is almost impossible to get rid of through bankruptcy and has large penalties for defaulting on. So I can't say I have a huge amount of respect for the system. And I have no qualms about using a government program for what is basically the purpose it was intended for.

[China.Pete]

Don't know much about the income-based repayment (IBR) option for student loans, either; but given the fact that most of us repaid our loans in 10 years or less, and any excess interest under this program will be added to your principal loan amount after the first three years, you should really compare the net present value of the loan repayments over 25 years before you decide whether it's such a good deal or not. A calculator for doing that can be found at http://www.finaid.org/calculators/ibr.phtml .

But the greatest uncertainty with IBR will probably be when you try to figure your income over a 25-year period. Even in China, your income can vary quite a bit (a range of $4,500 to $45,000 per year is possible). I can also imagine a scenario in which you pay very little for a number of years, and then upon returning home with your newly acquired Chinese wife and kid (because you've decided that that's the best place for your kid's future) being faced with substantially increased payments for the better part of the next 25 years.

[jm21]

3 years of law school on top of the 4 year university can really ramp up the student loans. I could afford them in China on a 25 year plan but no way a 10 year. And I know I'm not the only one in that boat. I have friends graduating from college with more debt than me. Tuition of $30+k/year is pretty common anymore. My receptionist's daughter just graduated and paid $45k/year in tuition for college.

Yes, you would definitely have to take a look to the future and plan quite a bit. But it seems like a lot of people on this forum are more concerned with lower hours than making tons of money.

And from a little searching, apparently the loan forgiveness would be taxable? Only the government coudl think up that one.

[IT2006]

[jm21]

[China.Pete]

"The difference between 6.8 and 8.3 to the dollar is pretty significant and I have no idea what things will look like down the road. China has a history of heavily depreciating its currency..." -- JM

Actually, the difference between 8.27 and 6.83 Remnimbi to the U.S. Dollar represents a substantial appreciation of the Yuan. In Dollar terms at least, you would be better off working for the same salary today than you were, say, five years ago. Take a run-of-the-mill university gig, paying �5,000 a month:

�5,000 / 8.27 = $605; but
�5,000 / 6.83 = $732.

[Hansen]

jm,

Do you really think that government loans were intended to be grants? They used to offer a grant program. Loans are intended to be repaid.

China is a very dicey job market; however, with a law degree and a license to practice law you might find a job at a decent university. A real question to consider is how long it will last.

To use a law degree as a means of attaining a position as an ESL teacher in China seems like an incredible waste of your time and energy. Is there any way you could land a case on contingency and hit a jackpot? As a matter of self respect, coming to China as a means of avoiding repaying taxpayers does seem like a questionable move.

The poster who mentioned your [possible] new wife and returning to the US makes a valid point. If you are a young man, you do need to consider possible future family responsibilities.

[jm21]

China Pete,

Yes, the RMB has appreciated recently. What I meant was that China, over the course of many years, has had a history of depreciating their currency to make their exports more attractive. Thailand and other SE Asian countries have complained about it on and off. Just about every country nowadays depreciates their currency but China has had a reputation for being more aggressive than others about it.

So my concern is that the Chinese government might someday depreciate their currency to make their exports more attractive. If the value went back up to 8.x rmb to 1 USD it would make a significant difference for repaying US debt. So, right now things look good for those teaching in China but it might not last.

Hansen,

I think that the government is recognizing that education expenses have gotten out of hand, in large part due to their own actions (reducing school funding and offering huge unsecured loans). Now they are offering an option to make life live-able for those who spent a lot on education but ended up in low paying jobs after graduation. The alternative for many of those people would be default anyways.

Anyways, it is just an option I mentioned since I thought it might be useful to those teaching in China. I'm not on it now and not sure if I ever would be, but it's nice to know if a low-paying job came up that I liked, say an under-funded legal aid position or something, I could take it and not worry about starving due to student loan payments.

[Zero]

To the OP:

About income and depreciation and so on. You could hedge your bets and balance things out because you mentioned doing online legal work. I assume that would be paid in U.S. dollars. As the value of the Chinese RMB fluctuated, you could adjust the amount of work you did for RMB (say, teaching English) vs. the work you did for U.S. dollars (online legal work).

Just a thought.

[Santos L Halper]

I think it's a silly query. Just because our govt devises a programe doesn't mean it's morally sound. Yes, I understand the angle of why not take advantage, as somebody will and it might as well be you. However,
I would advise you to suck it up, take a crappy job and pay off your debts.

Why did you go to law school, knowing you would be thousands of dollars under water when you came out? Was it hoping to make six figures as a 25 year old, or some idealistic idea that lawyers are the main force for good in the world, or just lack of direction coming out of undergrad, and may as well stay in school for want of any better options? It's all part of growing up and butching up.

I took an MBA, got a CPA, and worked in consulting for years. I hate it. However, I paid back my student loans and now am debt free.

Now I have the fliexibility to go any where and don't owe anyone anything. Also, I don't feel like a douchebag for sticking anyone else for debts I willingly incurred.

[Hansen]

Santos,

Nicely done. That makes sense. Frankly, I doubt that the OP is going to come to China, at least not now. Tossing years of professional preparation to teach English doesn't make sense.

I considered being debt free a prerequisite to landing in China. Took a while but it happened .

I've met attorneys who have achieved financial freedom who plan to teach in China. That makes sense.

[Tainan]

Hi,

Cleric asked:

[JZer]