Student loans while living abroad

Your federal student loans don't stay behind when you move abroad, but an income-driven plan based on your US tax return can keep payments low, and some overseas jobs still count for PSLF.

The short version

Moving abroad doesn't pause, cancel or defer federal student loans. Payments are due as usual, and missed payments lead to default.
The rules changed on July 1, 2026. The new Repayment Assistance Plan (RAP) and Tiered Standard plan opened, and SAVE borrowers are being moved off SAVE [1][2].
Income-driven payments are based on the adjusted gross income (AGI) on your US tax return [4]. Foreign earned income you exclude with the FEIE isn't in your AGI.
PSLF counts work for US government employers and US 501(c)(3) nonprofits, including overseas posts. Foreign governments and international organizations generally don't qualify.
RAP payments count toward PSLF [3].

What changed in 2026

The One Big Beautiful Bill Act, signed July 4, 2025, rewrote federal student loan repayment [3]. The final rules took effect July 1, 2026 [7]. Here's the alphabet soup, in brief:

Plan	Status in late 2026	How payments are set
Repayment Assistance Plan (RAP)	Open from July 1, 2026	1% to 10% of AGI depending on income, minus USD 50 a month per dependent, with a USD 10 monthly minimum. Any balance left is discharged after 360 qualifying payments [1][4].
Tiered Standard	Open from July 1, 2026	Fixed payments over 10 to 25 years, depending on how much you borrowed [1]
Income-Based Repayment (IBR)	Stays open for borrowers with loans made before July 1, 2026	10% or 15% of discretionary income, capped at the 10-year standard payment [7]
PAYE and ICR	Closing; borrowers must choose another plan by July 1, 2028 [1][7]	Existing terms until then
SAVE	Blocked by a court; borrowers get a 90-day notice from their servicer to switch [2]	If you don't choose, you're placed in Standard or Tiered Standard [2]

If you took out any new loan on or after July 1, 2026, including a consolidation loan, your income-driven option is RAP [7]. Parent PLUS loans aren't eligible for RAP [4].

The rules are still being phased in. Log in to studentaid.gov and check exactly which plans your loans qualify for before you pick one.

How foreign income affects your payment

Income-driven plans look at your AGI from your federal tax return [4]. That's where living abroad really moves the needle.

If you use the Foreign Earned Income Exclusion (FEIE), the excluded salary comes out before AGI. For tax year 2025 you can exclude up to USD 130,000, and USD 132,900 for 2026 [5]. A teacher in Spain earning the equivalent of USD 45,000 who excludes all of it could report an AGI near zero, and a payment at or near the plan's minimum.
If you use the Foreign Tax Credit instead, your foreign salary stays in your AGI. The FEIE takes excluded salary out of your taxable income [6]; the credit only offsets the tax on it, so your loan payment is based on all of it. You get credit for foreign taxes on your tax bill, but not on your loan payment.
Investment income, US rental income and self-employment income generally can't be excluded with the FEIE, so they stay in AGI.

That doesn't make the FEIE a no-brainer every time. The FEIE versus Foreign Tax Credit choice affects your US tax, refundable credits and future flexibility too. A US expat tax preparer can check your situation, and it's worth mentioning your student loans to them. See our guide to the FEIE versus the Foreign Tax Credit.

Married to a non-American

Under RAP, if you're married and file your US return as married filing separately, you can leave your spouse's income out [4]. Many Americans married to non-Americans already file separately, so check how your filing status and your loan payment play together before you decide.

If you don't file a US return

If your income is below the filing threshold and you don't file, you can usually certify your income another way, with alternative documentation such as pay stubs. Foreign pay stubs need converting to US dollars. Ask your servicer which documents it accepts.

Recertifying and staying in touch with your servicer

Income-driven plans need your income every year. From abroad:

Consent to IRS data sharing when you apply on studentaid.gov. The Department of Education can then get your tax information directly, which saves you uploading documents by hand [1][2].
File your US return on time. Your loan payment depends on it. If you're catching up on missed returns, see our guide to the Streamlined procedures.
Keep your contact details current. Update your email and a foreign phone number on studentaid.gov and with your servicer. Letters to an old US address won't reach you.
Make sure your login works abroad. Your StudentAid.gov account and servicer login may need a code by text. Set up an option that works from your new country before you leave.
Pay by auto-debit from a US bank account. It's the easiest way to pay on time, and many servicers knock a little off your interest rate for it. See our guide to keeping a US bank account.
Save every letter and payment record, especially if you're working toward PSLF.

Servicers' US toll-free numbers often don't work from abroad. Check your servicer's website for a direct-dial or international number, or use secure messaging.

What happens if you stop paying

Federal student loans don't vanish because you live overseas, and Uncle Sam has a long memory. If you default, the government can collect without a court order, including taking your federal tax refund and part of some federal benefits, such as Social Security when you start receiving it. Default also lands on your US credit report. See our guide to keeping your US credit score alive from abroad.

Public Service Loan Forgiveness abroad

PSLF forgives the remaining balance on Direct Loans after 120 qualifying monthly payments while you work full time (generally at least 30 hours a week) for a qualifying employer. It's the employer, not the job or the country, that qualifies.

Work abroad	Counts for PSLF?
US federal government overseas, such as the State Department, Peace Corps or a military base	Generally yes
A US 501(c)(3) nonprofit, working at its overseas office	Generally yes, if you're employed by the US entity
A US state or public university running a program abroad	Generally yes, if it's your employer
A foreign government, foreign public school or foreign public hospital	No
An international organization such as a UN agency	Generally no
A local foreign nonprofit, even a charity	No, unless it's a US 501(c)(3)
A US company, even doing public-interest work	No

A few practical points:

Payments made under RAP count as qualifying payments, along with payments under other qualifying plans [3].
Use the PSLF Help Tool on studentaid.gov to check your employer and submit the PSLF form. Your employer has to certify your employment, so ask your US payroll or HR office, not a local office.
If you were on SAVE, move to another qualifying plan when your servicer tells you, or you'll stop earning PSLF credit.
Under current federal law, PSLF forgiveness isn't taxable income in the US. Forgiveness at the end of an income-driven plan can be treated differently, so ask a US expat tax preparer when you get close.

Before you move: a checklist

Log in to studentaid.gov and list every loan, its type and its servicer.
Pick or confirm a repayment plan that fits your expected foreign income.
Set up auto-debit from a US account you're keeping.
Update your email, phone and address with your servicer.
If you're aiming for PSLF, get your employer certified before you leave and plan how you'll keep certifying.

Student loans while living abroad: repayment plans, foreign income and PSLF