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ambrosse
October 9th, 2014, 22:31
Hello~!
Long-time lurker, first time poster.

So I'm applying for the 2015 cycle and the grace period on my loans is coming up fast.
Were I to get chosen as an ALT, I'd be paying some of my student loans back.

Has anyone here had to deal with paying some portion of student loans while in Japan? Does anyone have any suggestions on things to get in order regarding loans before departure?

miamicoordinator
October 10th, 2014, 00:56
Hello~!
Long-time lurker, first time poster.

So I'm applying for the 2015 cycle and the grace period on my loans is coming up fast.
Were I to get chosen as an ALT, I'd be paying some of my student loans back.

Has anyone here had to deal with paying some portion of student loans while in Japan? Does anyone have any suggestions on things to get in order regarding loans before departure?

Hello Ambrosse,

In this day and age, I believe the majority of JET participants(especially the ones who are just graduating) have loans to pay off. Most JETs in Japan use a service called GoRemit to send back money to the States. That way, they can pay off their loans from the US banks. The rates are very reasonable, and they seem to go the go-to company as of now.

I must point out though that the main JET Programme webpage says that they do not encourage people to become a JET with the intention os using it as a method to pay back loans. As of right now, after insurance, 1st year JETs will bring home about 2,400 dollars. Depending on your living expenses/utilities/gas/rent etc... you could end up with 1200 dollars a month left over, or 200. it depends on your spending habits, and if your CO subsidizes any of your expenditures, like housing or transportation. There are just too many variables to be able to say "You will have plenty of money to pay off loans!" It really depends on how well you manage your money. If you go off to Thailand/Korea/Malaysia monthly, and spend 100 bucks a weekend on alcohol then you most likely arent bringing home the big bucks.

On the other hand, I have a good friend of mine who went to Japan 3 years ago as a JET, and was fortunate enough to be placed in a location where he was able to live comfortably and save about 800 dollars a month. He has ben sending this home for the past 3 years and will pay off his 30k students loans by the time he returns home. I am sure he has sacrifced outings and vacations, but he did not want to be burdened with debt and loan payments when he came back to the U.S. It has worked out well for him!

The best thing you can do is set up an account here that you will use for paying back your student loans, and remit money monthly back to that account. That way you can do everything online. I know it can be difficult to pay back loans from a Japanese bank account, so that is why people remit money to a US account so they can do everything electronically. I am sure some current JETs in Japan will chime in on this conversation since many people find themselves in your same shoes. Good luck.

ambrosse
October 10th, 2014, 01:16
Thanks for the tip! :D

Currently I'm setting money aside for JET (travel costs to interview/departure site, paperwork costs, and arrival money), and once my loan repayment period begins in January, I'll be trying to pay off smaller loans ahead of time. If I don't get into JET, well, all that money will go toward paying off loans I suppose!

I understand that most people have no idea what their financial situation will be until arrival. I find myself being a rather frugal, penny-pinching person, but surprisingly still manage to find fun things to do for little to no cost. That being said, many activities/trips may be tempting, but I suppose I'd have to use my best judgement in the end.

A friend of mine was on JET in Fukui for three years and managed to pay of a good amount of loans as well.
I was actually considering consolidating my loans (as best I can) to have a better interest rate/monthly payments. I figured another temporary option would be to do a minimum payment monthly that'll keep interest from adding up for the time being. I definitely do not want to defer my loans. I don't need any more interest piling up.

Antonath
October 10th, 2014, 01:19
Miamicoordinator is correct that most JETs use GoRemit (http://goremit.shinseibank.com/index?lang=en) for sending money home.

In the past, it was certainly viable to pay off loans while working as an ALT / CIR. However, with the new pay scale that came in a few years ago and the current exchange rates, money is much tighter than it used to be when it comes to sending it home. It's certainly not impossible to pay off loans, but it's harder than it used to be.

It's also worth taking into account set-up costs in Japan, should your application be successful. The general rule of thumb is that new JETs should bring about $2,000 US with them. Some need more, some less.

miamicoordinator
October 10th, 2014, 01:25
Miamicoordinator is correct that most JETs use GoRemit (http://goremit.shinseibank.com/index?lang=en) for sending money home.

In the past, it was certainly viable to pay off loans while working as an ALT / CIR. However, with the new pay scale that came in a few years ago and the current exchange rates, money is much tighter than it used to be when it comes to sending it home. It's certainly not impossible to pay off loans, but it's harder than it used to be.

It's also worth taking into account set-up costs in Japan, should your application be successful. The general rule of thumb is that new JETs should bring about $2,000 US with them. Some need more, some less.

With the new exchange rates and weaker yen, we are suggesting from $2500-$3000 now for first month expenses, especially for Tokyo JETs who have to set up new apartments when they get there.

But yes, it is harder to pay off loans now, but not impossible.

ambrosse
October 10th, 2014, 01:25
In the past, it was certainly viable to pay off loans while working as an ALT / CIR. However, with the new pay scale that came in a few years ago and the current exchange rates, money is much tighter than it used to be when it comes to sending it home. It's certainly not impossible to pay off loans, but it's harder than it used to be.

It's also worth taking into account set-up costs in Japan, should your application be successful. The general rule of thumb is that new JETs should bring about $2,000 US with them. Some need more, some less.

I really don't expect to be able to fully pay off any of my loans. I just want to keep loans current (even if that must be done with a minimum payment) while I'm out of the country. I'm glad that there are ways to go about doing that.

And yup! Currently I'm collecting money to put toward the start-up costs. I was actually reaching more for $3000 for a bit extra security if my application is accepted.

Antonath
October 10th, 2014, 01:29
With the new exchange rates and weaker yen, we are suggesting from $2500-$3000 now for first month expenses, especially for Tokyo JETs who have to set up new apartments when they get there.
This sort of information is yet another reason we like having you around here :D

spman2099
October 10th, 2014, 06:56
So I can't speak for every location, or every situation, but I am having no problem saving money. Without ANY struggle it is easy for me to stash away about $500 a month. I saved around $800 this month without much effort. I think, if you were super careful, you could save pretty close to twice that (in my specific situation). That being said, my rent is cheap and food can be purchased for a pretty reasonable price around here. I know at least one person that pays about four times as much as I do in rent, has significantly more expensive groceries, and is taking frequent trips; she has to live off of the kindness of strangers the last few days before she is paid.

Also, there are some large expenses coming up in the not so distant future for me which will probably inhibit me from saving any money for a few months...

So yeah, I guess ESID? But on average, at least with the people I know, most people are able to save a reasonable amount.

krayziesensei
October 10th, 2014, 08:00
Like everyone has said, ESID. I was a JET for one year. I lived in a city in a nice part of town less than a 5 min walk to the main station (where the shinkansen and other trains stopped). I took a trip to the states and bought a laptop. I didn't feel like I was living frugally. I returned to the States with $20000 US. However, I didn't own a car and I only sent money home when the exchange rate was favorable. I don't think I'm typical, but it gives a picture of what is possible. I essentially "saved" two-thirds of my salary.

uthinkimlost?
October 10th, 2014, 08:06
I returned to the States with $20000 US.

I can't even begin to grasp how that was accomplished.

Were you on the old payscale?

krayziesensei
October 10th, 2014, 08:09
I can't even begin to grasp how that was accomplished.

Were you on the old payscale?

I was a JET in 2007. Also, the yen to dollar exchange rate was less favorable than it is now.

webstaa
October 10th, 2014, 09:10
I was a JET in 2007. Also, the yen to dollar exchange rate was less favorable than it is now.

That being said, the favorability of the yen/dollar rate peaked tin 2011 after the disaster. AFAIK it peaked at around 69 yen to the dollar. So those that abandoned ship generally sold their yen for other currencies (or stock etc) and railroaded the exchange rate en-masse. Considering that the official rate is around 108 today, due to the dollar kicking 7 kinds of ass. Got if you left with 1.5m yen in 2011, you got $21.5k out of it. If you got out today with 1.5m yen, you'd only get $13.8k. (Unless I fucked that math.) 2007? Looks like it peaked at around 123 yen to the dollar, so you got out around 2.5m yen. Which is definately do-able if your CoL is low.

Even on the current payscale, a newbie JET gets close to $2k month US, give or take. If you've got upper 5 figures of debt, you might not be saving all that much.

That being said -

1. Contact your lenders and make sure they know you're moving overseas for work. You should be able to get a few months of forbearance/deferment out of it while you get set up.

2. Then budget like a mofo for the first few months - save it up and transfer it back. Generally, the larger and fewer the transactions, the less you pay in fees, so investigate the fee structure and min/max that shit. It's your money, don't just throw it away to intermediary banks by sending small amounts each month.

3. Standard debt repayment applies - pay more now and you'll pay less in the long run. Pay off as much principle as you can as fast as you possibly can. Especially on anything with an interest rate higher than 3% (anything less and short term investments like CDs might have a better return.)

4. Remember that debt repayment is only one facet of you're financial life. If you want to buy something, think it through, and buy it if you want. Things include: trips (you might not get another chance later, either to other countries or back home for visits,) merchandise (if you're going to get use out of it instead of letting it sit, go for it.)

5. The IRS requires all US citizens to report their foreign bank accounts over $10k USD (at any time - if you break the $10k threshold you file or forfeit) to file the FBAR by June 30. So saving money in the bank in Japan isn't that great of an idea. Plus terrible interest rates. Like .020% on savings accounts. (Although my bank allows members to buy CDs in Australian dollars, where the interest rate is closer to .9 - 1%.)


In my case, I paid down about $9k USD on my loans over the first year on JET. And I took a 2 week vacation to travel all over Honshu with a friend. And I still had more than enough to buy a new $2k road bike. And I still have quite a bit in the bank as well.

krayziesensei
October 10th, 2014, 09:23
Some other things I should mention. I did a weekend English Camp with a few ALTs and got paid extra for that. Also, I taught a weekly private lesson I got paid for. You can make great contacts doing this kind of thing. They usually fell in my lap by hanging around a local nomiya a friend of mine (Japanese) owned. Make Japanese friends! It makes your life so much easier!

krayziesensei
October 10th, 2014, 09:33
The stipulation of no outside work has been there as long as I can remember and many do it anyway. I'm sure it will depend on your CO if it's a big deal or not.

miss_doitsu
October 10th, 2014, 19:45
I did loads of private lessons when I was there. I just didn't make a whole song and dance about it.

Note to British JETs: I know a fair few people who have "hidden" from paying back their loans. I wouldn't advise it, but it isn't as impossible as people make out, I guess. I paid mine back each month like a good girl. :061:

Shincantsen
October 11th, 2014, 02:26
Just wanted to pop in and mention, when you're looking at the pay scale, remember that you won't be paying tax (for most countries, as far as I know). So if you've lived off of $2400 a month salary in the US, you'll actually have a few hundred dollars extra under JET that isn't going to taxes.

miamicoordinator
October 11th, 2014, 02:34
Just wanted to pop in and mention, when you're looking at the pay scale, remember that you won't be paying tax (for most countries, as far as I know). So if you've lived off of $2400 a month salary in the US, you'll actually have a few hundred dollars extra under JET that isn't going to taxes.

It is important to note that the tax emeption for US citizens only lasts for 2 years only, and only if you go as an ALT. CIR visas do not allow for the tax exemption agreement with the U.S.

krayziesensei
October 11th, 2014, 03:33
You also get the pension refund.