Unfortunately, moving to Canada to avoid student loans is a strategy ridden with holes and numerous consequences. While it is possible to leave your student debts behind and move to Canada, you might return to a massive financial mess that makes it difficult for you to acquire a home, get a professional license, or pay your living expenses.

And even if you do not intend to come back, you will be severing all ties, giving up your credit and assets, and also leaving a family member to deal with your debts. You are allowed to move abroad if you have student loan debt as there is no law prohibiting it.

Moving to Canada might turn out to be the best financial decision for your future. You may find a better job, healthcare, cost of living, or even love in Canada. However, note that the only genuine and legal way to move to Canada and avoid your student loans is to leverage the benefits of being in a country with a reasonable cost of living and great earning potential to attain financial sustenance much quicker and pay off your student loan debt.

However, if you are moving to Canada to avoid student loans, note that the government wouldn’t even bother chasing you down. It would be too expensive to initiate a lawsuit and obtain a judgment against you in an American court.

Nonetheless, there are consequences for your actions and they will catch up one day. There is no statute of limitations on your federal student loans and the government can charge you to court whenever you return to the U.S. Renouncing or changing your citizenship will not affect your student loan debt. You are still obligated to repay the money you borrowed to complete your education.

However, for the private student loan debt, moving abroad can make it challenging for the lender to serve you a lawsuit. While your state’s statutes of limitations might keep private lenders’ lawyers at a distance, it won’t stop collections agents from demanding payment.

Consequences of Moving to Canada to Avoid Student Loans

Just as noted above, some consequences come with moving to Canada to avoid paying your student loans. These consequences include;

  1. Implicating Your Cosigner

One of the most notable consequences of moving to Canada to avoid paying your debts is that your cosigner will be at the receiving end of your debt payment defaults. If the student lender can’t find you, they are permitted to go after any cosigners on your loans.

It simply entails that your parents or any family member or friend who helped you out by consigning on your loans will be held in your place. These people will start getting calls seeking payment and might even have their wages tampered with if you still can’t be found. Therefore, unless you intend on moving to Canada with your cosigner, you might want to take another look at this strategy.

  1. Your Student Loans Will Still Be Waiting

Have it in mind that nothing will absolve you from your student loans or make them magically disappear, not even moving to another country. While it is very possible to leave your student debts behind and move to Canada, you might return to a massive financial mess as interest will continue to accrue, and your overdue payments will keep piling up.

One very genuine way to pause payments is to seek deferment or forbearance. There are many ways to take a break from your repayment. In the United States, under certain terms, you can defer your loan payments for up to three years. And if reducing federal loan payments would help your situation, consider income-driven repayment (IDR) plans. You will only be asked to pay a percentage of the income you bring in each month.

  1. Your Credit Will Suffer

Regardless of where you are, in Canada or at home, if you don’t pay back your loans, your credit report and scores will suffer. After all, according to FICO, payment history makes up 35 percent of your credit score. Owing to that, when your lender reports your loan as delinquent or worse, in default, the mark could stay on your U.S. credit report for as long as seven years.

Have it in mind that a marked-up credit report or reduced score will impede any efforts you make to obtain more loans, and obtaining a new credit card or applying for a mortgage will be a lot more challenging or expensive once you return to the U.S.

  1. Risking Your Financial Future

Unless you intend to sever all ties, give up your credit and assets, and also leave a family member to deal with your debts; you might one day return to the US only to discover that you can no longer acquire a home, get a professional license, or pay your living expenses.

Aside from that, you will become a person of interest to the IRS, as they will always want to collect your unpaid debts. The government will always find a way to take its money, and the longer you are delinquent, the more they’ll take from you.

  1. Resort to Using Cash Only

Even if you avoid all of the consequences noted above, you might find that you have traded your student loans for another tough financial situation. Although Canada is a nation with a vast range of opportunities, you might have to resort to transacting with cash only as you can’t establish a credit history if you are not an official resident of Canada, and you’ve got an accumulation of student loan debts back home.

Unless you have substantial cash at hand to acquire a home, make investments or establish residency, this move is a bad strategy. Even if you have such funds, it is easier to just pay off the loan and move if you are still bent on moving.


Instead of moving to Canada, your best solution to eliminate your student loan debt might be to stay right where you are. Unless you are confident that you will find everlasting happiness in Canada and live there permanently, moving to the country to avoid paying your debts isn’t a smart move.

If you have cosigners, it genuinely wouldn’t be fair to them. But aside from your cosigners, this is a bad move that could come back to haunt you later in life. Meanwhile, there may be other solutions to help you avoid wage garnishment and the significant debt that you are dealing with.