Blog post by Casey Morse and Janhvi Gogna, American University
Refugees, among the most vulnerable populations globally, face an uphill battle to rebuild their lives after escaping persecution and threats to their human dignity. When refugees cannot return home, they may pursue resettlement outside of their country of origin. The United States is one of the top countries for resettlement, with 100,034 refugees resettled in the 2024 U.S. fiscal year (October 2023 to September 2024). Despite the safety and new opportunities provided by resettlement, certain resettlement schemes, designed to be supportive, can be exploitative in practice, namely travel loans provided by the International Organization for Migration (IOM).
When refugees cannot afford the cost of travel to the United States, the IOM will issue an interest-free loan to cover the cost. Refugees must sign a promissory note before their departure guaranteeing their repayment of the loan within a determined period after arrival, typically after five to six months. The average loan is $1,100 per person. For repayment, the IOM has established agreements with resettlement agencies that allow them to collect on debt payments and receive 25% of the amount for up to five years before it is sent back to the IOM for further collection. This percentage functions as additional revenue to be made by the agencies, separate from their regular government contracts, as payment for their assistance with collection. These loans aim to reinforce the IOM travel program’s core belief that “Refugees’ financial participation in making repayments against their debt will strengthen their determination to make a success of their migration.” However, evidence shows that these travel loans put newly resettled refugees in profound debt, creating stress and further vulnerability during the resettlement process.
GoFundMe pages for families’ IOM loan debts are evidence of this reality. However, there are a few drawbacks to using this qualitative data that should be considered. Though not the focus of this research, there is not confirmation as to what families did with money accrued by the fundraisers. Additonally, exact dates of key timeline events, including arrival to the United States, were not readily available in all cases. Lastly, though these are public pages, the specific details of these families’ stories have been anonymized due to a lack of explicit consent. However, despite these limitations, there is still great value to be found by utilizing this dataset. These pages provide important insight into the personal experiences of refugees regarding travel loan debt, something that is not found in the minimal quantitative data currently available on the subject. It is also critical to note that through further examination into the the GoFundMe page organizers and linked sites within the pages, such as RefugeeOne, the information presented in the GoFundMe pages appears to have a high level of credibility. Although further qualitative and quantitative data would be beneficial to increase understanding of the magnitude of the problem, the cases explored here are key to illustrating the dire situations refugees find themselves in due to IOM travel loans.
One example is a family of five from Yemen that had at least $4000 in travel loan debt from the IOM upon arriving to the United States. Though one of the members found employment rather quickly, the family’s other responsibilities, including providing for family back in Yemen, prevented them from paying back the debt. The GoFundMe page explains that despite struggling themselves, the family continues to send money to their family in Yemen, who depend on the assistance to maintain their basic needs, including food. Wages from this one job were not enough to support their immediate family in the United States, send money to Yemen, and pay back the loan to the IOM. This family represents just one of many to feel this immense burden.
Another GoFundMe for a family from Syria serves as further evidence of the predatory nature of IOM loans. The page explains that the family of six (previously three upon arrival) had already been paying off the IOM loan for two years, but still had a balance of $2000 when it was posted to the site. The family found it very challenging to support the six of them with only minimum wage jobs and constant payments to their debt. Though both families’ fundraisers met their goals, the debt from IOM loans proved to be a significant stressor for these families, who had been through intense journeys to get where they were.
Additional evidence can be found in the financial struggles of the Al Samakeh family, a family from Syria whose story provides a further understanding of how resettling with a roughly $5,000 debt negatively impacts typical newcomer processes of job searches, language learning, and overall integration.
The International Rescue Committee (IRC) details the importance of financial stability for refugees, asserting that “Economic independence is the foundation of long-term stability and successful integration for new arrivals in the U.S.” As new Americans, credit history can impact essential matters such as obtaining adequate housing, employment, and credit. IOM travel loans put refugees in a situation in which they arrive with debt and must start paying it off almost immediately, while simultaneously searching for employment and housing. When newcomers are obligated to start paying their debt before these conditions have stabilized, they are placed in situations where they can be easily taken advantage of. While the IOM argues that travel loans foster independence and creditworthiness, the anecdotal evidence here suggests otherwise.
According to the IRC, this combination of having no credit history and new debt leaves refugees vulnerable “to high risk of early defaults and being targeted by providers of expensive, high-interest financial products designed for individuals with poor credit.” This concern undermines the IOM’s stated goal of these loans helping refugees integrate and contribute to the US economy, as well as acting to protect them against abusive and predatory lenders. With the pressure from debt, refugees will feel more obligated to choose employment and housing that is readily available, even if wages are not sufficient and conditions are suboptimal. These financial dilemmas of debt reinforce the argument that the IOM acts inappropriately by capitalizing on the vulnerability of refugees who feel an urgency to accept the loans lest they miss the opportunity for resettlement.
Furthermore, the financial burdens refugees face due to travel loans directly conflict with the principles enshrined in national and international refugee law. The 1980 Refugee Act strives for self-sufficiency for refugees, often focused on employment and earning an income sufficient for supporting their family without additional assistance, whereas Article 17 of the 1951 Refugee Convention protects the right of refugees to engage in wage-earning employment. These guiding principles are mirrored in the objectives of the IOM, which aim “to help refugees establish their creditworthiness which maximizes their chances of success.” However, when refugees arrive with debt that they cannot pay, they are at a significant disadvantage, and success is not easily achievable. Reliable credit lenders will hesitate to give credit to newly resettled refugees already in debt, causing a vicious cycle of other hardships ranging from risky employment to inadequate housing.
These testimonies and reports support the claim that the IOM travel loan program is flawed, but without the availability of public data on the debt and repayment rates of resettled refugees, the true extent of refugee debt and its impact are not yet known. The lack of transparent information about the program and its effects is a critical issue to be addressed. The IOM and the Department of State must commit to extensive research on the financial journeys of refugees resettled in the United States to better understand the unintended impacts of the loan program and act accordingly.
A possible alternative to loans that may help ease the stress of resettlement and improve the financial success of newcomers is a grant program dedicated to travel assistance. This grant initiative can be modeled after the Refugee Resettlement Program (RRP) in the United States, which gives Federal grants to States to provide cash assistance, medical care, and other necessary services to newly resettled refugees. Similar to the Refugee Cash Assistance (RCA) and Refugee Medical Assistance (RMA) aspects of the RRP, a travel assistance grant would provide Federal funding to the IOM to be used toward resettlement-related travel costs. Even if all travel expenses are not entirely covered, at the very minimum, the grant will provide significantly reduce travel costs and lessen the burden placed on refugees. The U.S. government and the IOM not only have the financial capacity to support such an endeavor, but also the moral responsibility to act in the best interest of refugees that is not compatible with the current exploitative loan practices they perpetuate.
As Bob Carey, who oversaw the Resettlement and Migration Policy for the International Rescue Committee, said, “There are inherent contradictions with bringing refugees here for humanitarian purposes, and then putting what may be an undue burden on them.” The IOM and State Department must do everything in their power to address these contradictions and prevent causing unnecessary harm during an already delicate period for newcomers. By reimagining resettlement financing to remove the practice of travel loans, we can ensure refugees are empowered to rebuild their lives without the shadow of debt.
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