A record number of student loan borrowers are in delinquency and default. Some are making the drastic decision to leave the country and abandon their loans.
By Laura O’ConnorApril 4, 2026
Amanda Lynn Tully, 37, moved to Prague and defaulted on her student loans. She hasn’t made a payment in over seven years. Milan Bures for The New York Times
Amanda Lynn Tully spent her teenage years as a ward of the State of Colorado and believed a college degree was her ticket to a better life.
So, when she graduated in 2017 with a master’s degree in historic preservation from the University of Oregon, $65,000 in federal student loans and no job offers in the conservation field, she felt misled.
“I was never financially stable because I was never taught to be financially stable,” Ms. Tully, 37, said.
Less than a year after graduating, Ms. Tully made a drastic decision: She moved to Prague, where she had completed an internship, and defaulted on her loans. She hasn’t made a payment in over seven years.
More than 40 million borrowers are saddled with federal student debt, and a record number — 7.7 million — have defaulted on their loans, according to recently released data from the Education Department.
For some borrowers, moving abroad and out of reach of debt collectors can be tempting. In interviews, people who made this decision cited relieving the psychological burden of student debt as a motivator, as well as having a higher quality of life, even on a lower salary, outside the United States. Many who fled abroad, including Ms. Tully, said they had no plans of ever returning.
Figures on the number of borrowers who abandon their loans in this manner are unknown, but many debtors have shared their experiences on forums like Reddit. Credit reporting agencies like Experian, aware of the issue, have advised borrowers who have moved abroad to “resist the temptation to stop making payments.” Borrowers in delinquency and default will likely see their credit scores plummet, raising their borrowing costs and making it difficult for them to access credit.
Ms. Tully was on an income-based repayment plan, which allows many borrowers to have their remaining debt forgiven after 20 years of making qualifying payments. She was paying $60 per month when she defaulted. This amount, to many, may seem manageable. But for her, it remained psychologically burdensome.
“The payments weren’t even paying off the interest, so it was frustrating,” Ms. Tully said.
Stanley Tate, a Baltimore lawyer specializing in student debt, warns against this approach. “Federal student loans are contractual debts,” he said, meaning the obligation to repay does not go away, regardless of citizenship or residency. Moreover, the foreign earned income exclusion often allows federal student loan borrowers who live abroad and earn less than $130,000 (for the 2025 tax year) to pay $0 per month under an income-driven repayment plan, he said, recommending this path over defaulting.
But affordable payments haven’t stopped borrowers on such plans from defaulting — abroad or at home.
Michele Zampini, associate vice president of federal policy and advocacy at the Institute for College Access and Success, or TICAS, has seen borrowers in a situation similar to Ms. Tully’s, with seemingly manageable payments, default because of a combination of low earnings and a sense of hopelessness.
“The payments weren’t even paying off the interest, so it was frustrating,” Ms. Tully said. Milan Bures for The New York Times
“The psychological weight of carrying debt is a really widespread issue, even if it seems financially manageable,” she said. “It’s not necessarily ‘I can’t afford it.’ It’s sometimes ‘It feels like I had no other choice but to go to college and I had to take out loans to go, and now I’m going to be stuck with this,’ which can define people’s lives in a way that feels very unfair and harmful.”
In 2016, Eric Cooper graduated from a state school in Georgia with a degree in logistics. He received good grades and found a job as a logistics manager earning $52,000 a year almost immediately. But he had $80,000 of student debt, most of it consisting of parent PLUS loans through his mother.
“I did what everyone says to do — go to college, sign up for the loans,” said Mr. Cooper, now 31. “My concern when I was 18 was that it was a lot of money, but everyone tells you that you’ll get a good job and pay it back, no problem.”
Mr. Cooper’s payments were over $600 a month, and he was living paycheck to paycheck. He considered his options and planned to default not long after graduating, realizing his debt would take decades to pay off.
“I thought about it one day and was like, ‘Am I really going to be doing this until I’m 50 or 60?’”
His primary concern was the parent PLUS loan. “If I left and didn’t pay it, they would be forced to,” he said of his family. After working for three years and making timely payments, he refinanced the loan into his name with a private lender. Within months, he moved to Southeast Asia to teach English and continued making minimum payments while applying for citizenship in his new country. He stopped paying when it was secured.
Mr. Cooper defaulted on his loans in 2019, changing his email and phone number, never alerting debtors to his new address.
“I think there were a few letters sent to my parents, but after the first year, I just never heard anything from anyone,” he said.
For Enrique Zúñiga, debt wasn’t on his mind when he began his studies. He received a full scholarship to Princeton and was grateful to avoid having student debt — until he received a $16,000 tax bill.
Mr. Zúñiga, 25, comes from a working-class family in Tiltil, Chile. In his final year of high school, EducationUSA, a State Department initiative to recruit international students to the United States, came to his class and handed him pamphlets for Princeton, where he applied to study chemistry and later switched to majoring in Spanish and Portuguese.
Mr. Zúñiga was living in university accommodations while dishwashing part time, with his scholarship covering both his tuition and his living expenses. But Mr. Zúñiga didn’t realize that all funding exceeding his academic costs represented “nonqualified” funding, meaning that it was taxable.
Princeton states on its website that most nonacademic funding (including for international students) is taxable, but Mr. Zúñiga did not recall being told this. When he received his first tax bill from the university at the beginning of his second year of studies, he panicked.
“I walked into the financial aid office, and I told them: ‘I don’t have this money, so what do I do? I need to enroll in my classes,’” he recalled. Princeton offered him a private loan to cover the tax bill. Mr. Zúñiga had hoped to stay in the United States after graduating and find a good job with his Ivy League degree. With these plans in mind, he took on additional private loans to cover his tax bills until graduation.
TICAS has advocated for all scholarship funding to be nontaxable to prevent students from taking on tax-related debts. However, Ms. Zampini said she had never seen a situation like Mr. Zúñiga’s, where the university provided loans to cover the taxes. The student newspaper has also published an opinion article highlighting the issue.
In July 2022, Mr. Zúñiga graduated with $16,736 in loans to Princeton. He received letters and emails demanding payment almost immediately. After months of unemployment and couch-surfing, Mr. Zúñiga found work as a legal assistant and interpreter at a legal charity in Philadelphia, but he was still unable to afford payments.
By November 2023, Mr. Zúñiga had paid back less than $1,500, and loan servicers began demanding he make more payments. He was then offered a job in Shanghai as a college admissions counselor.
“I thought to myself: ‘Well, they can’t enforce any judgments against my debts. I might as well go,’” he said. Before moving to China, he tried to negotiate with the loan servicers, but he said they were unwilling to budge.
Even in Shanghai, a Chinese loan recovery organization began contacting Mr. Zúñiga almost daily throughout 2024, urging him to pay his debt to Princeton.
“I was depressed,” he said, describing a cycle of receiving daily phone calls and blocking numbers. Today, Mr. Zúñiga still receives emails about his debt, which has grown to $28,196.13, but he has no plans to pay it back.
Besides the emails, debt plays virtually no role in Mr. Zúñiga’s life in Shanghai. Ms. Tully and Mr. Cooper also lead seemingly debt-free lives. They largely rely on local jobs and freelance work, still living comfortably despite earning far less than their American peers. Both have visited the United States without encountering issues and said they rarely thought about their debt.
Ms. Zampini said she was concerned about the narrative that defaulted borrowers living abroad were “gaming the system,” or being such a small minority of borrowers that their experiences shouldn’t motivate policy change.
“This is one piece of the bigger puzzle of how borrowers are managing,” she said. “The fact that someone would need to make such a drastic life change driven by student debt is, itself, an indictment of a broken system.”
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