$0 Payments (Legally)

Payments are going up.

Business Insider profiled SAVE borrowers this weekend whose payments are jumping — from $54 to $644, from $326 to $2,100. The SAVE plan is gone, and millions of borrowers are watching their monthly payments triple overnight.

The New York Times ran a story on Friday about borrowers who moved abroad and stopped paying altogether — I was quoted in it.

The Times profiled three borrowers who defaulted after leaving the country. One was paying $60 a month. The NY Post picked it up. Reddit tore it apart. The internet did what the internet does.

The borrowers in the article don’t reflect what most people are dealing with. The stories weren’t sympathetic, and the coverage made it easy to dismiss the whole idea as irresponsible.

But moving abroad isn’t always running from debt. Sometimes it’s the smartest move a borrower can make.

I have a client living in Spain. He owes $200,000 in Parent PLUS loans. He also co-signed $400,000 in private student loans for his child. His child has had serious mental health issues, and he’s already raided his retirement to cover medical expenses.

Now he’s overseas — and even if he wanted to come back to America, he couldn’t afford to live here. We’re filing an adversary proceeding to deal with the private loans. But his federal loans? He’s on an income-driven repayment plan paying $0 a month. Legally.

That’s the part the Times article buried.

How $0 payments work abroad

The Foreign Earned Income Exclusion (FEIE) is a tax provision that lets Americans living abroad exclude about $130k of foreign-earned income from their federal tax return. If all of your income qualifies, your Adjusted Gross Income drops to zero — or close to it.

Your IDR payment is calculated from your AGI. If your AGI is zero, your payment is zero. No default. No credit damage. No collection calls. No burned bridges if you ever want to come back.

And those $0 payments still count toward IDR forgiveness. Twenty years on IBR, and your remaining balance is forgiven. If you work for a qualifying employer abroad, they can count toward PSLF too — 10 years, 120 payments, done.

The woman in the Times article was on income-based repayment, paying $60 a month, when she defaulted. If she had claimed the FEIE, she could have been paying nothing — and building toward forgiveness the entire time. Instead, she lost all federal benefits and has no path back to forgiveness until she gets out of default.

To use the FEIE, you have to meet one of two IRS tests: the bona fide residence test (you’re a resident of another country for a full tax year) or the physical presence test (you’re outside the U.S. for at least 330 days in a 12-month period). You claim it on IRS Form 2555 when you file your return.

Once your AGI is reduced, you recertify your income with your servicer. Your payment recalculates. If your AGI is zero, you pay zero.

The key: you have to stay current on recertification. If you miss your annual recertification deadline, your servicer will recalculate your payment based on your loan balance — not your income — and the jump can be enormous. That’s how borrowers abroad end up delinquent even when they qualify for $0: What Happens When Income Certification Lapses Abroad.

If you’re abroad or thinking about it

• Foreign Earned Income Exclusion & Student Loans: How It Works — How FEIE interacts with IDR, what qualifies, and how to claim it.
• What Happens to Student Loans If You Move Abroad — Federal loans don’t disappear when you leave. What the government can and can’t do, and the smarter path forward.
• How to Get Student Loan Forgiveness if You Live Abroad — IDR forgiveness, PSLF with overseas employers, and what you need to know about the tax hit when forgiveness comes.

I also have a video interview scheduled with international tax attorney Alexandra Sabalier later this month to go over the FEIE in depth. I’ll share the YT link once it’s available.

If you’re not abroad,** but your SAVE payment just disappeared**

If your payments are jumping because SAVE is gone, you have options — and you don’t have to wait until July to act. The Department is emailing SAVE borrowers now, your servicer sends a formal notice July 1, and you have 90 days to pick a plan. But you can switch to IBR today.

• Should You Switch IDR Plans in 2026? — The decision tree for SAVE borrowers choosing a new plan.
• Income-Driven Repayment: How It Works — If you need the fundamentals before comparing plans.
• Student Loan Default: Consequences & How to Fix It — If you’ve already missed payments or are thinking about walking away, read this first.

Default is a trapdoor — once you’re through it, every option gets worse. Whether you’re abroad or stateside, find the path that protects you now and keeps your options open later.

If you want to walk through your situation, you can schedule a consultation here: https://www.tateesq.com/book-a-call

I promised an update on the consultation model. Here’s where we’re landing.

We’re leaning toward a split: one day a week of 20-minute sessions at $200, and two days a week of 50-minute sessions at $450. The shorter sessions are for people who know their question and want to get straight to strategy. The longer ones are for people who need more room — to ease into the conversation, to cover multiple borrowers, or to work through something complicated. (Some of you try to squeeze three family members into 20 minutes. We can do it, but it’s tight.)

A lot of you have asked whether we’d bring on someone else to help with consults. I hear you. But from what I’ve seen, most of you want to talk directly with me — and truthfully, some of your situations need the kind of advanced analysis that a generalist or a certified student loan professional isn’t equipped to do.

That said, not every question needs that level. Some of you just want to talk it through with someone and make sure you’re not missing anything. So maybe there’s a version where we offer both — meet with a certified student loan pro at one price, meet with the attorney at another. I haven’t landed on that yet. It feels transactional, and I don’t want someone with a simple question to feel like they can’t talk to me just because there’s a cheaper option.

The goal is to keep the price point accessible for anyone who wants to speak with me directly — especially right now, when everything else is getting more expensive. More to come.