student loan debt

Teach English Abroad to get out of Debt

Teaching Abroad to get out of Debt

Some people spend their entire lives searching for their purpose in this world.  Although I have ventured down other career paths, I always find myself back at the same conclusion. I was born to be a teacher and have an innate passion for education. However, the American education system fails to pay teachers a livable wage. Many teachers choose to teach English abroad to help them get out of debt.

The Struggle of Student Debt

Any college student can tell you that a good education does not come cheap. My scholarships and financial aid covered a large portion of my tuition. However, I was still left with a large amount of debt to settle each semester. I had no desire to take out more loans, so I worked several part-time jobs and pushed myself to graduate early.

I also had the unfortunate luck of graduating the same year as the mortgage crisis. Being a part of the so-called “unluckiest generation” meant we were plagued with the burden of student debt, high unemployment rates, and slow economic growth. I  received a few job offers after graduation, but nothing that offered much hope to get out of debt. The teaching jobs were in the worst school districts and the salaries were on par with fast food workers. There was no possible way I could afford my rent working a single job, let alone build savings.

The Teaching Path Less Traveled

I sought advice from my mentors and family, unsure which direction to go. I ultimately decided that it was not in my best interest to accept such a low paying job. Rather than working a full-time teaching job and continuing my part-time side work, I chose to enroll in a graduate program abroad. While this meant accruing more debt in my pursuit of higher learning, I was able to finish my master’s degree in only two years at a fraction of the cost. My post-graduate degree also opened a myriad of doors that led me to other opportunities I had not even considered.

In my final months, I met some foreign exchange students who planned to use their diplomas to teach English abroad. We were all disenchanted with the unfulfilled promises of a college degree. The prospect piqued my interest, but the opportunity, salaries, and benefits packages seemed too good to be true. I had no desire to return to the United States to work a minimum wage job or live in my parents basement. I returned home with a sense of cautious optimism and a burgeoning plan.

Teach English Abroad

I spent months comparing job offers in Latin America, Europe and Asia. I agonized over my decision before I realized it was time to stop dreaming and make it a reality. Ten years later, I can tell you  that it was the best financial decision I have ever made. While some postings are definitely better on paper, many ESL jobs offer competitive wages, free accommodations, flight reimbursements, and national health care.

By comparison, Asia offers the highest salaries with the lowest cost of living. This means you can maximize your savings and pay off your debts without resorting to a diet of instant noodles or a life of social hermitage. I was personally able to pay off all my credit card debts and student loans in my first year living in Taiwan, and have built a healthy nest egg that has allowed me to start planning for a more comfortable future.

Where to Start

The starting salaries for teaching English abroad differ from country to country.  Graduate degrees and certifications also secure better pay. Currently, the highest paying jobs for English teachers are in Japan, China, South Korea, Taiwan, Saudi Arabia, Kuwait, and the United Arab Emirates. The best paying teaching positions will likely take you to exotic and remote locales, but there are still decent positions in popular tourist destinations like Thailand and Vietnam. Some countries in the Middle East even offer contracts that pay up to $80,000 for only nine months of work if you are brave enough to travel there.

It was a difficult decision to teach abroad, but for me it provided the keys to my financial freedom. Many English teachers only spend a year or two before returning home to find employment, but I have chosen to make a career of teaching English overseas. I have been able to pay off all my debts, save nearly $1,000 each month,  have affordable health care and am rarely required to work more than 30 hours each week. While this may not be an ideal solution for everyone, it provided a clear path out of debt and helped me gain control of my life and finances.

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How to Reduce Your Student Loan Payments

how to reduce your student loan payments

Student loans make it possible for people from various financial backgrounds to take advantage of higher education; however, they can also be quite the burden. This is particularly true when you are just starting your career. Because of this, knowing how to reduce your student loan payments will be important, regardless of whether or not you are a recent college grad.

How to Reduce Your Student Loan Payments

Refinancing and consolidating the debts accumulated from your student loans will not only lower your monthly payments but also save you thousands over the course of repayment. When you first graduate from college, you are granted a grace period of typically six months before you have to start paying back on your loans. Unfortunately, many tend to continue to put these loans on the bottom of their to-do lists instead of focusing on them right away. By doing so, you set yourself up for future financial heartache.

When you neglect to pay on your loan, it becomes delinquent. After nine months without paying, it goes into default, hurting your credit and future loan opportunities. In fact, when you don’t pay on your federal loans, they will garnish your wages and take your tax refunds to collect what is due to them, as stated in this 2015 Business Insider article by Matthew Speiser. Imagine explaining that one to your boss…

Luckily, many financial institutions will allow you to refinance your loans for a lower interest rate, especially if you have a great track record. This has been made easy online where you can quickly compare and refinance student loans to get more favorable terms.  But, before you even start down this path, you need to know and understand the different loan options and what your company can offer you.

Refinancing

You’ll want to ask yourself a few questions as advised from Student Loan Hero as you start to refinance your loans.

  • What are my goals? What are your goals to refinancing? Is it to reduce your monthly rate, eliminate the debt as quickly as possible, or to achieve lower interest rates? Know which of these will be most beneficial to you when considering loan options. Student Loan Hero provides a handy student loan refinance calculator you can even use to weigh out what options will be best for you.
  • What options do I have for interest rates? Refinancing your existing student loans means you essentially replace these with a new loan. Thus, this gives you the opportunity to get a lower interest rate, Student Loan Hero writer Elyssa Kirkham explains. Determine your current rates and use this to compare with new ones. Kirkham adds that you can expect federal student loan rates to range from 4% to more than 7% while private student loans will typically range from 9% to 12% or more, but you might luck out and find rates as low as 2%.
  • Will I need a cosigner? As with any loan, if your credit score is poor or non-existent, you may be required to have a cosigner.

When considering refinancing options, think about how much you owe, how long it will take you to repay your loans and your current job situation. Do you feel stable in your current position? If your debt is nearly gone, refinancing may not be a benefit to you. Additionally, make sure to compare rates you find online with local lending companies, such as a credit union or bank.

Also keep in mind that while you can refinance both federal and private student loans together through a private lender, it may not be the best option. Learn more about why from LendKey here.

Loan Consolidation

As you research more how to reduce your student loan payments, you’ll likely see loan consolidation options. This is another way to lower your monthly payments and debt. What happens when you consolidate your student debt is that you are taking your loans and combining them into one larger loan with a fixed interest rate. Usually, you won’t have to worry about any consolidation fees. This process allows you to pay one monthly fee instead of different payments with different interest rates. But, loans can only be consolidated under the same borrower; multiple borrowers cannot consolidate their loans together.

It is important to note that you cannot consolidate loans while you are in still in school. Not to mention, you want to make sure you weigh out the costs of consolidating compared to you your current rates and payments. Don’t be afraid to ask as many questions as possible to the companies you are considering working with for your consolidation.

If interested in learning more about debt consolidation, check out one of our recent articles on how to consolidate your loans.

Loan Forgiveness Programs

Loan forgiveness programs exist to help those employed in public service jobs. These include teaching, medicine, law, the military, and some volunteer positions. Through these programs, a few thousand to more than $100,000 worth of student loan debt may be eliminated. Check within your industry to see what is available and where you can apply.

Before making any changes to your current student loans, though, make sure to revisit your original loan terms. You may have borrower benefits you could lose if you switch to one of the above options.

Once you know how to reduce your student loan payments, living a debt-free life does not seem as unattainable. Hopefully, these student loan tips can help you, no matter how long ago you graduated.

Have you tried one of the above for your student debt? What was your experience?