I’ve been in the JET program for almost a full year. However I have student debt back in the US and the Yen is crumbling to the rate it was at back in October 2022. On a JET salary I simply cannot afford to really do anything and am living paycheck to paycheck because half of my paycheck goes back to the states to pay for my loans. I know I’ll be getting a ¥20000 raise in a few months, but that doesn’t mean much when ¥150 is equal to only $1. Does anyone have financial advice on how to tackle a problem like this? Some suggested to take out another loan, but I really don’t want to be in more debt. I’m just kind of at a loss because I’m contracted for another year and have no choice but to stay on JET nor do I want to leave JET.
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Your AGI when you file your American taxes is zero so if you sign up for income based repayment, you won’t be obligated to pay any money on your student loans. Obviously still pay what you can on your loans cuz you’ll still have interest when that starts back up, but at least you can control how much you pay and can enjoy your time in Japan a little more.
Edit: Forgot you are first year. Your Japanese income can be excused for tax purposes, but if you had a job the year prior to JET in America, that will be your income. Unless you worked full time though, your AGI will still be very low so income based repayment is still the way to go.
I’m actually having the same problem right now. I finally had to email my financial planner and ask what I need to do because it’s starting to make me really anxious and I’m worrying constantly now.
And it definitely doesn’t help when others invite you out or to travel because then you get FOMO and/or anxiety from the money probs.
Are you trying to pay off the loans quickly? You’re awesome with putting 50% toward the debt. That said, crunch the numbers and think of your goals, but in general, I’d say pay as little of the low-interest loans as you can for these few years until you’re back to the states earning dollars. You’re never gonna come out ahead with the currency conversion.
I really feel like JET isnt for people with debt in this current economy. Im sorry to tell you that but it really just is how it is. I am not too familiar with how it all works but u/e_ccentricity gave some good info. Hopefully it works out for you OP goodluck.
I’m sure you are frustrated but the financial realities were something you should have considered before deciding to do JET (or any other job). Now you have some tough choices to make.
If you are spending half your paycheck (280,000 * .5 = 140,000) on your loan repayment that’s roughly $1000 currently on repayment based on the current value of 1 JPY = 0.007 USD.
You were notified of acceptance to the JET program around April 1, 2022. The exchange rate then was 1 JPY = 0.0082 USD, so $1000 US would have required you to send 122,000 JPY instead, a difference of 18,000 JPY a month. So in fact your 20,000 JPY a month raise will put you roughly back to where you would have been when you accepted the program.
The cold hard truth is you had enough information at the time to have an idea what your finances would look like and while they have certain becoming tougher it was foreseeable as the yen was already declining by that time and continued to decline as the JET pre departure process continued. At the beginning of August, when you would have arrived, the yen wasn’t much better than it is now.
As others have mentioned you can try working with your loan servicer to reduce your payments based on your current income. If that’s not possible you’ll have to decide if you want to continue living on the amount in Japan or return home to try and find a better paying job. It’s not ideal but unfortunately sometimes in life we face tough choices like this and there is no easy way out. I’m sorry if this comes across as harsh, I do understand the disappointment but it’s also something you can learn from and should go in to with realistic understanding of the situation.
Are your loans public or private? if public, you can apply for income based repayment plans that might reduce your amount you need to pay monthly to zero. (Interest will still accrue and you will need to eventually pay back the loan still.) I would stay on JET if all your debt was public.
If your loans are private, you need to make more money, either freelancing on the side while still doing jet or moving back home and finding a higher paying job. It sucks but them’s the breaks.
Can I ask how much you are currently paying monthly for your loans? That can help give some advices towards your particular situation
I would contact your loan distributor and let them know. They have income driven plans and can lower your monthly rates
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Do you HAVE TO stay in Japan? There’s got to be higher paying English teaching jobs elsewhere.
That said, as an American you are eligible for defense jobs in Japan which are paid in dollars, and DoDEA pays a boatload of money ($100k at some locations with relevant experience).
Hmm, actually after your first year on JET programme, you’ll be starting to pay for resident tax from July. You’ll also need a lump sum of money at the end of JET to pay the remainder of resident tax.
If you have other skills or experience and you don’t want to leave Japan, I’ll suggest that you look for a better paying job in Japan and break your contract.
Saw a comment where you said that it wasn’t only student loan repayments but your living costs in Japan too. Maybe look at reducing your livings costs/expenses here, for example consider switching to a cheaper phone contract or internet contract.
I was lucky enough to pay my student loans off my first 3 years on JET, but it was TIGHT. Now, I’m paying off cancer treatment on my American cards here in Japan, it SUCKS! But I’m grateful it’s not 400K like it would be in the states, lol! Keep fighting that good fight!
I feel guilty for celebrating weak yen each time as an exchange student from the US
Student loan interest should still be frozen from the pandemic, right? I’m not paying a cent of mine until they get unfrozen, and even then I’m still holding out hope that they’ll be cancelled to some extent.
That said, I’m on a dispatch ALT salary. JETs have it real nice, I make about 220k yen per month before taxes and pension and such with one 20k yen bonus per *year* and no rent subsidy or anything of the sort. I’m in the cheap inaka with no car and I still live paycheck to paycheck with $0 left over to send back home. That said, I *could* be living much more frugally than I am lol. Gonna have to start, once student loans get unpaused
This is why it’s best not to come with debt. Since you’re already here, what happened with the student loan repayment thing? Didn’t they freeze payments for a while without gaining interest?
Simple. Don’t pay your student loans.
Edit: the Supreme Court is set to release its ruling on Biden’s student loan forgiveness plan in the next 8 hours. It will likely be struck down and declared unconstitutional due to conservative justice majority.
Unfortunately, the biggest problem for the English language industry is that they can keep bringing the salaries down and individuals like the OP will fill the positions and suffer. At some point though, the industry will have to collapse or the wages will have to go up….but it’s not going to happen if people in those industries down demand more wages. I remember hearing that JET paid extraordinarily well for no experience or licenses back some decades ago…so when it started to collapse new hires should’ve asked why they thought their love of Japan trumped their desire to actually earn enough to live.
If you ever get a chance to have some money for investing, please look into high interest savings accounts, mutual funds, and stocks (but do your research and don’t gamble).
EDITED OUT stuff about supplementing your income. Could lead to visa issues.
This is why the JET website explicitly says you can’t pay student debt with your JET income and to figure something out
The more I find out about America, the happier I am that I wasn’t born there lol
With the JET pay already being quite low I guess it’s always tricky to plan financially when all the world’s currencies are so inconsistent right now. I agree with what other people have said so far. I think your best options would be to either take out another loan (might be difficult because you don’t have any US income) or just go back to the states.
You could go back and sort out your debts and then return to Japan through a different programme when you’re more financially stable.
My advice would be to find a cheaper apartment. How much is your rent?
You can get a school-sponsored apartment for ~32,000 Yen. It might not be choice, but that leaves you 70,000 extra yen to play with. If for food you spend ~20,000 yen and utilities is 7,000 yen, cell phone + internet 5,000 yen, then you’ll have 51000 extra yen every month! you could use this money for your loans, for me-spending, or whatever. Hope this helps.