The US student loan debt has surpassed the 1 Trillion USD Mark, but it doesn’t mean you are in loan-slavery. The the majority of college graduates today finance their education through borrowing. You may think, “Will I ever get a chance to pursue my dream of teaching abroad in countries where the wages may not pay off my loans quickly?”
The answer is a resounding “Yes”.
#1 Student Loan Deferment or Forbearance
Call the bank that carries your loan and ask them about deferment options. Sally Mae allows for an Internship, Fellowship or Residency Postponement that will work in partnership with Long-term Impact Training Teach and Study Internships with AcademicsInAsia.com. You can also explain that you will have an economic hardship as you teach abroad. ACS Website explains:
Deferments allow the borrower to temporarily postpone payments in specific situations. During the deferment of an Unsubsidized loan, you will be responsible for all interest which accrues. Interest which is unpaid at the end of the deferment period will be capitalized (added to the principal balance of your loan).
The Federal Government pays the interest on Subsidized loans during the deferment period. In order to qualify for a deferment, you must meet the specific eligibility requirements for that deferment type. Your eligibility for deferments is determined by the date that you obtained your first Federal Student loan. The following deferments are available to borrowers whose loans are serviced by ACS. Click on a specific deferment type to review the eligibility requirements.
The Federal Student Aid website is a great resource. Their YouTube Video sums it up visually:
#2 Choose Affordable TESOL Certification
TESOL Certification can be seen as a hoop to jump through or a tool for training. We recommend spending less on TESOL Certification and getting your first TESOL job among experienced supportive staff for your first year or two. Then, if you want a career in TESOL, spend your money on a MA Degree which will give you more places to teach and open up opportunities to train as lead teacher or professor of TESOL in the future. We partner with American TESOL Institute, TEFL Express and Global TEFL Course.
#3 Ask Employers, “How much can I save” – NOT, “How much is the salary.”
Cost of living varies by a scale of 10 and schools may or may not provide housing, food, insurance, airfare, or paid holidays. Make sure you can ask, “How much can I save in a 12-month period.” Here is a tool for estimating how much you will make and save in a month or year: Download Salary Estimator Tool. Here is another tool you can use to compare Sias University to other offers: Benefits Comparison Tool
#4 Pay off your debt as you teach
We had one couple who both taught determine that one income would be for spending on local travel and to travel during the amazing Sias University 6-week Winter Holiday. They saved the other income to pay off debt. They ended up in Thailand with 2 weeks left before returning to China and found a great deal at McDonalds where they ended up eating every day for $6 a day for the both of them. They accomplished their goal, but with a little more planning they could’ve enjoyed Phad Thai or Pineapple Fried Rice. All that to say, make a plan before you get there and stick to it or you will spend all your money. Transfer the money home every month using online banking, Ali Pay and PayPal. Read about how to do that in this Global Times Article.
#5 Take Advantage of Foreign Earned Income Exclusions
This is straight from the IRS Website (as of June 2016 – see source for updates):
If you meet certain requirements, you may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction.
If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts.
You may also be entitled to exclude from income the value of meals and lodging provided to you by your employer. Refer to Exclusion of Meals and Lodging in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, and Publication 15-B, Employer’s Tax Guide to Fringe Benefits for more information.
#6 Public Service Loan Forgiveness (PSLF) Begins in 2017
Public Service Loan Forgiveness (PSLF) will only apply to you if you are part of a 501(c)(3) organization based in US as you work overseas. See FAQ answer #38 on the Student Aid Website. Learn more. Forgiveness begins after 120 qualifying monthly payments made after October 2007, so it takes at least 10 years to start. Looking for a company to join, consider, Long-term Impact Training (LIT) – a registered 501(c)(3).
US Voice Mail/SMS: 209-877-SIAS (7427) (year-round)