The Truth about Student Loans

Listen to this – I’ve been doing some research on them and I did find out that it’s only been since the late 70’s that lenders have been protected from people discharging student loans in bankruptcies.

But get this – they’ll sell your loan off to a company that will do remediation. That’s nice but they also whack you an 18.5% fee on top of the balance. So if you owed say $70,000 you’d get whacked with a $12,950 fee, bringing your balance to $82,950!

It reminds me of the prohibitions on interest present in the Jewish, Christian, and Islamic texts.

In the Bible it’s Deuteronomy 15:1-7 —

Deuteronomy 15

15:1 At the end of every seven years thou shalt make a release.
15:2 And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the LORD’s release.
15:3 Of a foreigner thou mayest exact it again: but that which is thine with thy brother thine hand shall release;
15:4 Save when there shall be no poor among you; for the LORD shall greatly bless thee in the land which the LORD thy God giveth thee for an inheritance to possess it:
15:5 Only if thou carefully hearken unto the voice of the LORD thy God, to observe to do all these commandments which I command thee this day.
15:6 For the LORD thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee. (15:7-8) Cited by Associated Baptist Press in defense of the Affordable Care Act.

(15:7) “If there be among you a poor man … thou shalt not harden thine heart, nor shut thine hand from thy poor brother.”

I think the key areas here are 15:1-2 – every seven years there is a release that is God’s release. And when you think about it, U.S. Bankruptcy law is based on the Bible. So why aren’t student loan creditors?

If you read the entire seven verses you get the idea – there is to be forgiveness for debt. But by allowing the student loan industry to get away with this, we are violating Biblical principle.

Even though I’m not Christian or Muslim, there is some good, practical ways of doing things in the books. Our legislators would do well to look at the book from time to time.

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2 thoughts on “The Truth about Student Loans

  1. I am Christian, and so will comment from that perspective.

    First, having a bit of humility and (as Clint Eastwood says) A man has got to know his limitations…, I note that I am in no postion to force banks and/or lending institutions to forgive my debt. I can ask them to do it. But God does not give me the power or authority to force or demand it.

    That being said, I will toil to repay as best and honestly as I can. I will live up to my agreement. I will honor my word. But…

    But you are right to observe that this debt is not righteous, does not honor God, and the way to make it right is through forgiveness. There is a financial injustice commited here. I was young and naive when I signed those dotted lines. My parents, my culture, and the Christian institution that brokered the deal, all helped me to believe I was investing in my future. I did not have a debt advocate guiding me. I was considered to be a consumer, and in our culture at that time, consumerism was treated as supreme – not to be defiled.

    I was young and naive going up against bankers and lawyers with their high-powered marketing strategies, pooled knowledge, congressional lobby benefits. Was that fair? Legal? Yes… to legal; No… to fair.

    In Matthew 25, we find a great judgment scene. This is that famous passage that identifies Jesus with the poor – the sick, the prisoner, the hungry etc. That is oft-noted. However, it is the testimony of these poor that either convicts or vindicates the one on trial! This means that when my life comes of for review, all the evidence of prayer, fasting, devotion, etc that I leave in my wake will not have the power to persuade the judge like the testimony of the poor around me. What will they say? I am sure I will be hanging on every word!

    It also says to me that as those bankers and lawyers take their turn in the hot seat, my testimony will either convict or vindicate. When the prosecutor of life asks, “Did they forgive your debt?” I need have no scorn in my heart, only honesty. If I can say “Yes” on that occasion, then they will be vindicated. If I must say “No”, then there will be no need for further prosecution.

    In the meantime, I warn them about this coming day. They that choose to believe, then have the costly decision of whether to live it out or not. Those that choose not to believe can go on with life as if it does not matter. As a believer, I have a duty to warn, but once warned, my hands are clean. I go on toiling to be honorable as best I can. I also take warning. This is an aside to the point I am making and to your post, but it is overwhelmingly obvious and needs to be acknowledged. If I am to be true to the Judge, then I must forgive those who owe me as well (Matt. 18).

    This may all sound a bit passive and weak. I suspect it can be viewed that way. It sounds like it simply lets the world go spinning off out ouf control and giving it a blessing as it goes. And there is a danger of doing that, in my opinion.

    However, I also believe that there is no power on earth like that of FORGIVENESS. Forgiveness, when come to full bloom is a life-giving power. It does not merely restore to the point of origin for the pain, but goes back retro-actively and creates a new world. And as a believer in YHWH – God, I believe it not only honors him, but is the very power that brings the dead back to life.

    Yes, there is a gamble effect here. I could be completely wrong. I could be delusional. But all worldview options must face that gamble, and this is the one and only one that offers even the possibility of healing through and through the whole cosmos. It is at that point that I say, what seems passive and weak (and runs the actual risk of really being that) is (or at least can be) paradoxically active and potent beyond measure.

    This means I need to love a banker, as well as the poor. Or perhaps more appropriately love the poor, warn the banker, and roll out a welcome mat to the banker to come and join the party that forgiveness holds for him/her.

    That is a lot to lay out as a first-time reader/responder to your blog. Take it or leave it. But I hope it blesses you.

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