How to Pay Off Your Student Loans by Teaching English Abroad

 December 23, 2020
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You want to travel the world, but your student debt is holding you back. Fortunately, there’s a solution: You could teach English overseas. By teaching English abroad, you might be able to lower your cost of living and use your salary to pay down your student loans.

If you’re interested in teaching English abroad, here are five facts to know, including details such as what salary you might expect and how to simultaneously pay down your student loans:

Not all teaching English abroad salaries are created equal

There is demand for native English speakers to teach the language all over the world, but the amount of money you will earn depends on where you go, according to the International TEFL Academy, a teacher training program. Here’s what the program found:

  • Foreign English teachers in Europe and Latin America can generally expect to earn enough to live comfortably, with money left over for travel and other interests. However, you may not be able to save a lot, so if you have large student loan balances, you may not want to teach in those regions.
  • Expat English teachers in Asia can typically save between 30% and 50% of their monthly salaries after accounting for living expenses and basic travel and fun money. The amount of savings depends on the country. For example, you could save $200 to $300 per month in Thailand and $1,000 per month in South Korea.
  • The Middle East is where you could find some of the highest teaching salaries, ranging from $1,500 to $4,000 per month, with benefits that include free housing, paid vacation and health insurance. However, the job market likely will be smaller and more competitive.

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 native-English speakers at an international school. In most cases, however, you will be teaching English as a foreign language at a local school.

You may face qualifications and startup costs

Even though there is a need for English-speaking teachers all over the world, it’s not enough to just show up in another country with a perfect command of your native tongue and expect to find a job.

You typically must take a TEFL (Teaching English as a Foreign Language) or TESOL (Teaching English to Speakers of Other Languages) certification course, which can cost up to $2,000, depending on which organization you choose for certification.

When choosing a course provider, consider the accreditation and training hours it offers. Most schools hiring English teachers seek candidates with accredited certifications and at least 100 to 120 hours of training. Some of the best courses offer lots of support by helping you gain practice-teaching experience, assisting with school placement abroad and providing other guidance.

In addition, unless you can commit to a teaching position in a very wealthy country, such as Saudi Arabia or the United Arab Emirates, you may 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 are in order.

It’s important to consider the cost of living while teaching English abroad

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

In some places, for example, either public transportation or a bicycle will be all that you need to get around, saving you a car payment, car insurance, gas and maintenance expenses.

Rent and food will also cost far less in many English-teaching destinations, meaning your monthly paychecks will go much further, allowing you to pay down your student loan debt. Some of these countries will also allow you to join the national health insurance program, saving you more money.

Let’s look at how income and expenses stack up in three countries that are popular for those who want to teach English overseas:

  • China: According to Go Overseas, an English teacher earns an average of $1,400 to $2,200 per month in China, with private institutions and international schools offering salaries between $2,800 and $4,300 per month. A typical apartment costs between $350 and $650 per month, but some schools provide free housing, as well as reimburse your flights to and from China. Depending on your setup, you could have a nice lifestyle and save over $1,000 each month.
  • Costa Rica: English teachers in Costa Rica can expect to make a more modest $600 to $1,000 per month, according to teach-abroad website Go Overseas. Since an apartment in a large city like San Jose will cost between about $400 and $580, according to Numbeo, you might have to share lodging with others. With expenses eating up much of your salary, it’s likely you won’t end up saving much when teaching English here.
  • United Arab Emirates: Salaries for English teachers in UAE clock in at a generous $3,500 to $5,500 per month, Go Overseas says. You’ll find wide variations in cost of living, but a one-bedroom apartment in Dubai could range from $1,000 to $1,600 per month, according to Numbeo. So while costs are relatively high, salaries are, too, meaning you can save a moderate amount of money if you live frugally in UAE while teaching English. Plus, you might be able to find a school that provides housing as part of your teaching English abroad salary.

You could potentially pay $0 on your loans, due to the 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 $107,600 as of 2020. 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 aside even more money for your student loan payments.

If you’re living and earning your income abroad, you might even be able to lower your student loan payments to zero by opting for an income-driven repayment plan. There are several plans that tie the amount of your monthly repayment to your income, while also setting a timeline for repayment at 20 to 25 years, after which any remaining balance is forgiven.

These repayment plans usually use your adjusted gross income to estimate how much you owe per month. If you’ve been earning abroad, the adjusted gross income listed on your U.S. tax returns may be $0, which means the amount you’ll be asked to pay every month could also be $0, at least while you’re still living and working abroad.

That said, be aware that laws do change, and even under the current system, you’ll want to check with your servicer about your potential payments to avoid any surprises.

Teaching English overseas to pay off student debt is a great idea, but not for everyone

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 who teach English overseas 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 and spending in vacation mode.

It’s important to remember that it can be psychologically challenging to immerse yourself in a completely different culture — and the cost of changing your mind is high. If you’re not sure, talk to people who’ve taught overseas to get a sense of whether it’s the right fit for you.

If you dream of traveling but are not sure about the demands of living abroad long term, it may be smarter to pay off your student loans at home and plan for travel once you’re debt-free. But if you feel up to the challenge, know that paying off your student loans while teaching English abroad can be a viable option.

Rebecca Safier and Katie Gustafson contributed to this report.

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Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.

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Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

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All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
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  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
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This information is current as of April 29, 2021. Information and rates are subject to change without notice.

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You can choose between fixed and variable rates. Fixed interest rates are 2.99% – 8.24% APR (2.74% – 7.99% APR with Auto Pay discount). Starting variable interest rates are 1.99% APR to 8.24% APR (1.74% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

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Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.

8 Important Disclosures for PenFed.

PenFed Disclosures

Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.