How different would your life be without caller ID? You would actually feel compelled to answer each call. Once committed to picking up the phone, you would be pulled into a nasty conversation with a debt collector. “I’m happy to discuss my crushing debt with you, Mr. Collector,” said no one ever.
Avoiding those calls is one way to become a debt dodger. Thanks to the avalanche of unpaid student loans, more and more graduates are considering the dodge option and that could mean moving overseas and never coming back.
The Student Loan Crush
According to Market Watch, the student loan debt ticks up $2,726 ever second. As of this writing, that puts the total amount of debt at north of 1.3 trillion. Digging deeper into the numbers finds that 70% of all graduates carry a loan into the real world. That breaks down to 40 million Americans with student loan debt. The salary in your first job will go toward paying off that debt as opposed to buying a car or a home. This takes a bite out of the national economy. Without money to spend, the economy stagnates. Everything becomes about the drudgery of paying down that debt. I call this the “circle of debt.” Is there any wonder why debt dodgers are skipping town?
If you pick up, move overseas and don’t leave a forwarding address, it’s going to be hard for the debt collectors to catch up to you. Although debt dodging can provide temporary relief, it might not be a wise plan. Obviously, you won’t be paying a debt and that means more financial charges will incur. Plus, there is the damage this kind of default can do to your credit history.
What happens if you want to come back home? As soon as you get back on the grid, you’ll receive your delinquent payment notices. Be thankful you don’t live in New Zealand. A new law was passed that can lead to debt dodgers being arrested upon their return to the country. Too harsh? Perhaps, but it shows who holds the power in the legislature. What would happen if those kinds of laws were proposed here?
A Way Out of Debt
Several companies have recognized how debilitating paying off student loans can be. They want the “best and the brightest” for their company, which often means incentives. Instead of Google perks like sleep pods, pool tables and free food, some companies are offering to help pay off the student loans.
Microsoft helps employees with student debt refinance their loans through online lender SoFi. Shaving off a few hundred dollars on a monthly or annual payment can make a big difference for someone just starting out.
Also jumping on the student-loan-pay-off bandwagon is every Oscar winner’s favorite accounting firm, PricewaterhouseCoopers. They provide up to $1,200 a year for six years to help chip away at the debt. At software developer Chelmsford, employees can claim $500 a year for a long as they work there to pay off their loans.
Can Congress Help?
The issue of paying for college has become part of the 2016 Presidential campaign. Democratic candidate Bernie Sanders wants all public colleges to offer free tuition. That’s a sweet deal if it can happen.
Currently, the Employment Participation in Student Loan Assistance Act is making its way through Congress. That sets up a tax deferment of up to $5,250 for any employer who will help pay off an employee’s student loan. That is the kind of scenario we can all get behind.
Is debt dodging the answer? It might make you feel better temporarily, but sooner or later you’re going to have to pay up. It’s better to establish financial goals with a an experienced professional, work out a payment plan you can live with, make your voice heard at the ballot box and put that debt behind you.