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Student Loan in United States


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I am a Canadian citizen, but I lived in the United States for many years as a permanent resident. In 2001 I was going to school and had a student loan. I did not graduate for reasons that don't matter. I continued to pay on my student loan. In 2011 I moved back to Canada and was able to put my student loan in forebarence a couple times. I then had some financial difficulties and my student loan has gone to collections (Pioneer Credit Recovery). This week they tracked my down at work. They also faxed a form to my employer to verify employment which was intercepted by my Administrative Assistant so I actually have the fax and then they called my cell phone today. I am really starting to panic because I don't know how far their reach is when the debt is in the United States and you live and are a citizen of Canada.  It is not that I don't want to pay my debt, but I need to get a handle on my finances. With the exchange rate the payment can be very daunting.


I appreciate any advice anyone can offer. 

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If these are private student loans, they will not be able to collect at all. If these are federal student loans, they still cannot collect from you because the laws stop at the border. Many Canadians have tried to pay their US student loans only to by stymied because they reside in Canada.

The first thing I would do is determine if there is a Canadian version of the US FDCPA and what is says. Next, I would find out if your employer has a base of operations in the USA. If you employer does have a US base of operations, they might be able to collect through there although an attorney might be able to tie it up for years. If your employer does not have a US Base of operations, then they can pretty much tell them where they can shove their affidavit without any repercussion as long as they note that they are in Canada.

They also cannot collect from you across the border without a Canadian Court order and considering all the bad press on US student loans and debt collection, the odds of them getting one cheaply are about the same as the odds of the Maple Leafs winning the Stanley Cup in 2015. I think you can send an international CMRRR but you would have to ask Canada Post to make sure. I know I can do it from the USA to Canada as I have done it before. So, once you know they are harmless, I would send them a letter informing them to cease communications, that you are in Canada and hence uncollectable, and that they fall under Canadian Law if they try to contact you. That will scare them away.

If you have any assets in the USA, now would be a good time to get rid of them and convert them to Canadian assets. You might also want to consider giving up your permanent residency if you still have it. It will cause you more issues than it will solve.

Also realize that when you do go to pay this, you will have a very hard time doing so as they do not accept anything but US funds drawn on a US bank. If you do a search on Student Loans and Canada, you will find other posters having issues paying their US student loans from Canada.


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If these are private student loans, they will not be able to collect at all. 


This isn't true at all.  The OP can still be sued like anyone else and if they get a judgment Canada has a reciprocal agreement and the judgment can be domesticated there and collected on.  How far they will go to do this is anyone's guess.


If these are federal student loans, they still cannot collect from you because the laws stop at the border. 


Umm, NO.  Federally backed loans actually make it easier  Canada does not want its citizens borrowing money from other countries especially the USA and defaulting anymore than they want our residents doing so to them.  If asked their government will assist ours in collecting.


Many Canadians have tried to pay their US student loans only to by stymied because they reside in Canada.


They are not stymied because they reside in Canada.  They are stymied because the funds are expected to be returned in the same currency (dollars) that it was borrowed in and they do not want to pay the exchange rate to get a money order in US funds.  Payments are made ALL the time by foreign citizens and converted to another country's currency.  If you choose to return to your home country then having to pay an exchange rate to repay your debts is inevitable and does not give you a right to default.  

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A few things you are missing:

1) If you did a search as I described to the OP, you would find posts of people who reside in Canada and are Canadian citizens who have tried to pay their US student loans and have been turned back. Even the collectors went away once they realized that there was no way for the person in Canada to pay short of opening a US bank account which they did not want to do (for obvious reason) and the USA cannot force a foreigner to open a bank account here.

2) Most countries, including probably Canada, do not agree with the US civil justice system and will not rubber stamp US judgements. They force creditors to try the cases in their country under their rules which is expensive for creditors who will not get a summary judgement. Canada may be more open to a US judgement than say China but they still have to go before a Canadian judge who may not be friendly toward the USA, especially when Canadian citizens are involved.

3) I doubt the current administration in Ottawa has the political will or value to try to enforce this right now. Although it is a conservative administration, a Canadian Conservative is more akin to a New York Conservative than say a Texas Conservative. Add to that the fact that the current administration just lost in Alberta which is the Texas of Canada when it comes to politics. The last thing this administration needs now is a newspaper blasting out on how they are letting the USA bully a Canadian Citizen.

4) The relations between the USA and Canada are not the best right now. Who do you think really wanted the Keystone Pipeline? Add to that the differing values between the 2 countries and the fact that Canada usually thinks that they are bullied by their larger neighbor and you can see that they may not be receptive to allowing the USA free reign to collect on their student loans.

5) Finally, the employer does not have to follow US law or garnishment notices if they do not have a nexus in the USA. The US law stops at the border as the US found out when they tried to get England to extradite someone for breaking into government computers looking for evidence of UFOs. Outside of government cooperation, the only alternative to the USA would be to send in soldiers to enforce this. The last time they did that to Canada was in 1812 and the US soldiers got their buts kicked back to the US border.

Collecting on debts across international lines is harder than people think, even for student loans. If one wants to play hardball, they probably can get away with it. Less likely in places like Canada than places like China but even in Canada, everything depends on the political whims and how the court system deals with it. The expenses are huge and the political hay that can be made out of it is even more of an issue.

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Thank you very much for the information.  WhoCares1000 you sound very knowledgeable in both American and Canadian matters. I am not normally a person to not pay my bills, but it was very costly to move back to Canada and get my husband his permanent residency here. We have very good credit rating in Canada and I don't want to mess that up. We have no intention of ever going back to live in the United States and that being said I am no longer a permanent resident there. We do go back from time to time to visit. I believe it is a Federal loan as it is through Sallie Mae. Also, my company does not have any ties with America as I work for the provincial government. I understand exactly what you are refering to with trying to pay it back. Most of the time collection companies want access to your bank account with permission to withdraw the funds monthly. That will not work in this case. I am a little concerned and nervous because they are definitely playing hard ball. The collection company (Pioneer Credit Recovery) found where I work and called the 800 # asking for me. They have also faxed my employer asking for employment verification, but one of our administrative assistants brought it directly to me because she thought it looked a little odd. The collection agency has also called my home and my cell phone. I have not spoken to them yet because I want to make sure I have all my facts straight before I do so. I have also done a little research on Pioneer including the Better Business Bureau and they do not seem very reputable.


I really appreciate any information you can give to me WhoCares1000. If there was a way to reply to you directly I apologize I am new with forums.

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WhoCares1000 you are very smart and I thank you for your previous advice.  I called the collection agency today and I spoke with a supervisor who was very nice and he told me they cannot collect on the debt for my Federal Student Loan if I am living in Canada. They are not licensed to collect in Canada and because they still had my Texas address and did not bother to check the area code they were calling they assumed I was in the United States. The account is now updated and the only thing they can do is if I want to call them and pay it voluntarily.

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