How to Pay Off Your Student Loans by Teaching English Abroad

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Carrying student loan debt can feel very limiting. You might dream about traveling the world, but your monthly student loan payment keeps you chained to the job that allows you to avoid defaulting.

But what if there was a way to have your cake and eat it, too? Teaching English abroad offers college graduates the opportunity to travel, minimize their expenses, and still pay their student loans.

Here is what you need to know about teaching English abroad.

Not all teaching positions are created equal

While there is demand for native speaking English teachers all over the world, the amount of money you will earn depends on where in the world you go.

According to the International TEFL Academy, a teacher training program, American English teachers in Europe and Latin American can generally expect to earn enough to live comfortably, with enough left over for travel and other interests.

However, it’s less likely for teachers in these countries to be able to save extensively; graduates with large student loan balances may not want to teach there.

Expat English teachers in Asia can typically save between 30 and 50 percent of their monthly salaries after expenses and basic travel/fun money. Depending on where you teach, that savings can range from $200-$300 per month in Thailand to $1,000 per month in South Korea.

If you are interested in teaching in the Middle East, that is where you will find the highest teaching salaries in the world, ranging from $1,500 to $4,000 per month, with benefits that include free housing, paid vacation, and health insurance.

Also, the types of teaching positions vary from program to program. Some English-speaking teachers who have teaching experience and/or expertise in another subject may land a job teaching at an international school, with students whose first language is English. In most cases, however, you will be teaching English as a foreign language (TEFL) at a local school.

Qualifications and startup costs

Even though there is a need for English-speaking teachers all over the world, it’s not enough to show up in another country with a perfect command of your native tongue and expect to find a job. You must take a TEFL or TESOL (Teaching English to Speakers of Other Languages) certification course, which can cost as much as $2,000, depending on which organization you choose for certification.

As Lauren Bauer, the senior teach abroad manager at Greenheart Travel, explained to Business Insider, “Any legitimate organization should be accredited and … most hiring schools will want someone with a minimum of 100 to 120 hours of training.” She noted that the best programs “offer practice teaching experience, placement assistance once you earn your certification, and generous pre-departure and on-site support.”

In addition, unless you are committing to a teaching position in a very wealthy country, such as Saudi Arabia or the United Arab Emirates, you will have to cover the cost of your flight to your new home yourself. You will also need at least a month’s worth of spending money to last you until you receive your first paycheck, so careful planning and budgeting is in order.

Cost of living while teaching English abroad

The good news is that the majority of the countries where you might teach English abroad have a much lower cost of living than the United States.

For instance, either public transportation or a bicycle will be all that you need to get around in your new home, saving you a car payment, car insurance, gas, and maintenance. Rent and food will also set you back far less in other countries, meaning your monthly paychecks will go much farther. Many of the countries where you might teach will also allow you to join the national health insurance program.

Foreign Earned Income Exclusion

Another great benefit of teaching English abroad is the fact that you pay no U.S. taxes on anything you earn under $101,300 as of 2016. In order to qualify for the Foreign Earned Income Exclusion, you must live outside the U.S. for 330 days over 12 consecutive months.

You will still owe local taxes on your wages, so the money you earn is not completely tax-free. However, you are likely to have a much lower tax burden by teaching abroad, allowing you to set even more money aside for your student loan payments.

Should you teach English abroad to pay off your student debt?

For some graduates, teaching English abroad is both an exciting adventure and a savvy financial move. But living abroad while paying off student loans is not for everyone.

Most teachers in that position must still carefully budget their money to make sure they can cover their debts, and budgeting while abroad can feel constricting if friends and other expats are living in vacation mode.

It’s also important to remember that it can be psychologically challenging to immerse yourself in a completely different culture — the costs of changing your mind are high.

If you dream of traveling but are not sure about the demands of living abroad long-term, it might be smarter to pay off your student loans at home and plan for travel once they are gone.

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