A couple days ago I wrote about “snowbirding” in the Philippines and mentioned also that now days there seem to be quite a few of us living here who are as much “economy-birding” as anything else. Even though I was in good shape financially when we left the US (I have a very decent pension, which will also continue for my wife, should I pre-decease her, had money from wrapping up our business that we operated together in the US, etc.) , I really felt pressured back in the USA, living very modestly in Colorado.
We were taking stock just a day or so ago …having been forced into making an unplanned trip to the bank on December 29th … never go near the bank for the two weeks before New Years if you can help it … we were looking at our bank books from the Philippines and our US accounts, on-line, and marvelling how much we have been able to save in three years … without really feeling as if we were “saving”.
I was doing some research on other foreigners who might feel the same as we do when I came upon this article:
… Carl (who doesn’t want his last name used) stopped making his $450 monthly payments after his family incurred some unexpected medical expenses, and his $55,000 private loans went into default. That’s when the phone calls from debt collectors started, and Carl decided not to come back.
“It was made clear that if I ever came home, I’m screwed,” says Carl.
Today, he estimates his private loans are more than $70,000. Though he hopes to move home one day, for now, staying abroad is the only option he can see.
“If it means I have to live in exile from friends and family…well, that’s the breaks. So be it. But I won’t put my family in a situation where they are afraid,” he says.
While most Americans are burdened with debt of some kind, student loan repayment can be a particularly scary prospect for young people struggling to start a career. Payments are often higher than expected, and the loans can’t easily be discharged. Added pressure from debt collectors causes some grads to flee their loans by fleeing the country. … (Full CNN article on “Foreign Debt Fugitives” here)
Now I am certainly not one to advocate running out on debts. But I certainly am in touch with how Carl and many others in the same boat he is must feel.
I had no idea the US Student Loan situation was as bad as it is. When I was of school age, and even after I had kids of school age, Student Loans were nowhere near the business they seem to be now. Today, it seems that in addition to marching off like two-legged lemmings to sign up for more house than they can afford, more car payments than they can afford and many other debts that they do not, in any way need, a great many of my fellow Americans seem to think nothing of signing up to unbelievable debt to aquire a college degree.
If a college degree were worth what many think it is, perhaps this would make some sense, but a college degree is nothing but one tool, among a whole tool box full of knowledge and personal skills that you need to make good money. Overall, for an American, I guess it makes sense to have one. I don’t, but then again, many of you do. Not having one worked pretty good for Mr. Gates and quite a few other big name people, but Warren Buffet has one … from a good school, to, so I’ll spare you my anti-college tirade 😉
But people, people, people, use some common sense, will you? The numbers I see people racking up in student debt just makes no sense what-so-ever. Do the math on how long it will take you to pay that off and how much you are paying some third-party, like a bank, who contributes nothing to your education or income at all. Some of these folks in student loan trouble couldn’t pay off their loans unless they live until 90. And that makes no sense at all, degree from the Wharton Business School or no degree.
In particular I see a really strange thought process in my fellow US and Canadian friends. A fellow blogger and long-time online friend, Tyler Cruz, recently published a report on his activities for 2009 in which he beat himself up for his own performance. He had set a goal of clearing $150,00 for the year and wound up only clearing $90,000 +.
I bet there are more than a few people out there reading this that would say, “Wow! $90K! Wish I could do that.” Well, you can, but that is another story. What really “rang my chime” was a comment left by one of Tyler’s readers:
As Tyler said, “It wasn’t that bad.
A guy, experienced with building websites that make money fell short of his self-imposed goals.
Immediately, a ‘Go in debt for School’ bot chimes in with a suggestion of ‘go to school, then you’ll make money’.
It really boggles my mind, truly. Especially since Tyler already has years of experience in his chosen profession, which is taught by no school. By its very nature, “web work” is hardly ever taught effectively by a college.
By the time money-making skills become obvious, and some professor writes a text-book on them, and then some other professor writes a classroom course, and then the board of regents approves it being added to the curriculum, the school is taking your money to teach you “How to make money with Google Arbitrage”, or some other skill that “died” three or four years ago. Sad, how many have been sucked up in this pocket-picking charade.
Anyway, that’s my thoughts. If you have student loans that are dragging you under, I recommend you do everything within your power to settle them the ‘right’ way. But if there is already nothing left of you to give and the wolf is at the door? Sure, come on over. You can live here in the Philippines for, in average round numbers, 40% of what you will spend just to stay afloat in the US.
Also, the ‘Net works here just as it does in the USA … no reason you can’t make money here and pay off those debts while you live cheap and well, in the Philippines.