by Caitlin Meadows
Student loan debt is often deemed the “good kind” of debt. It’s referred to as an investment in the future. For many students, its a means to an end. But what about the Christian student? Is student loan debt an exception to the biblical rule?
Before we get to answering this question, let’s take a closer look at the current student loan situation in America.
Current student loan debt statistics in the United States.
According to Debt.org, the total U.S. student loan debt is currently at $1.4 trillion. In 2016, upon graduation the average student debt was $37,172. On the standard 10 year repayment plan with a fixed rate of 4.29 percent, these graduates pay an average of $382 a month (see Students & Debt). Should these graduates choose to stick with the plan and not accelerate it, by the end of their decade of repayment they will have paid a total of $45,779 for their 4 year degree. That’s an extra $8,607 in interest. Mind you, this is just including tuition and fees. Books, room and board, transportation, and supplies are additional and can amount to upwards of $56,880! (Refer to “Alternates to Student Loans” section and use the provided numbers to do the math.) Combine that with the basic tuition and fees of $37,172 and you’re looking at $94,052. That is a large debt to enter one’s career owing.
However, many graduates with thousands of dollars in student loan debt aren’t too concerned about it. They are what Jeffery Dorfman of Forbes.com calls “strategic defaulters.”
The problem of “strategic defaulters.”
In his July 2017 article on the student loan default crisis, Jeffery Dorfman notes that of students in loan repayment, those in default amount to almost 40 percent (See The Student Loan Default Crisis is Being Caused by Promises of Debt Forgiveness). Within this 40 percent are two types of defaulters: those who do not have the financial ability to make their monthly loan payments and those who are financially able but choose not to pay. He calls the second group “strategic defaulters”. This group chooses to default out of hope that a government forgiveness plan will come through for them, eliminating their debt free of charge.
“People are acting optimally” Dorfman explains. “Why should they pay student loans if there is a probability that all remaining student loan debt will be wiped away in the near future? Then anybody who was financially responsible, worked hard, lived frugally, and paid off her debts will be seen as a fool by those who stalled and won the political lottery of student loan forgiveness.”[ref]Ibid.[/ref]
This sort of strategic defaulting is dripping with dishonesty. Should a Jesus-follower subscribe to this method of handling debt, the effect on his or her Christian influence would be decidedly negative. But what about those who take responsibility for their debts?
What does the Bible tell us?
Two Interpretations of Proverbs 22:7 & Two Perspectives on Student Loan Debt.
An often cited verse on the issue of debt is Proverbs 22:7 which says,
The rich rule over the poor, and the borrower is slave to the lender.”
How this verse (and others like it) are interpreted influence the conclusions drawn on the biblical perspective of debt.
Perspective 1: God uses loans as a means of provision.
Tim Stebbings, Professor of Business at Gordon College told ChristianCollegeGuide.net that the point of Proverbs 22:7 is, “when you owe someone money, your relationship with them is affected. You’re obligated to them because you owe them something… But I don’t think you can use this verse to say that it’s wrong to take out a loan” (see What About College Loans? | Christian College Guide).
In other words, don’t be a strategic defaulter.
Stebbings continues to make his point, “The church needs people who will be salt and light in all areas of life. And to develop to your fullest, you might need a certain kind of education, which may mean taking out a loan.”[ref]Ibid.[/ref] But before opting to go into debt, he advises one to first explore other financial options and use wisdom. “To afford college, a family must be willing to look at their spending habits. They need to set priorities. They need to be willing to cut out some things in order to afford others. When they’ve done all that, when they’ve willingly made some changes to simplify their lifestyle, they may discover they have more financial resources than they thought they had.”
Bottom line, according to Stebbings?
“If you really need a loan, don’t be afraid to take one out. Just be sure you do so with honesty and integrity. And that means you’re able to pay back whatever you borrow.”[ref]Ibid.[/ref]
Perspective 2: God is our Provider in the present.
In contrast to the first perspective, one who holds the second biblical perspective on debt argues that if you have faith that God will provide a way to repay your debt later, you should have faith that He’ll provide for your college costs up front.
That is precisely the stance Chris Brown of stewardship.com takes on the matter. “If God wants you to pursue something, He’ll make a way for you to do it without debt. Jumping into debt to pursue a calling isn’t an exercise in faith, either. When people say, ‘God will provide,’ and then take out a loan, they’re saying they think God can’t provide without the help of a lender—and that’s just not true! He can meet our needs all by Himself. He’s God! We just need to learn to put our trust in Him alone” (see Would God Ask You Into Debt to Answer His Call?).
Brown contends that Proverb 22:7 may not label debt a sin, but it does discourage it.[ref]Ibid.[/ref] As Christian stewards, Brown makes the point that avoiding debt enables us to be generous with our time and money. “God would never put you in a position to be less generous or less able to answer His call—and going into debt does exactly that” (see Would God Ask You Into Debt to Answer His Call?).
Bottom line, according to Brown?
“Don’t confuse God’s call with God calling you into debt. If He’s calling you to His work, you can be sure that He’ll also provide you with the resources to do it debt-free” (see Would God Ask You Into Debt to Answer His Call?).
Is student loan debt okay for Christians?
Ultimately, we’re each accountable to God for the choices that we make. This includes our stewardship of all of His resources, including our minds, finances, and Christian influence.
There are many factors that contribute to an individual’s decision to earn a degree with or without student loan debt. For example, one’s time frame, career goals, family life, and financial situation. However, no matter what contributing factors may be in play, debt is always optional; always avoidable. Debt is a choice. And when chosen, it is a serious responsibility.
The ability to learn and the opportunity for education are tremendous gifts. There are many careers that are dependent upon proper college educations and credentialing for good reason. But acquiring an education does not have to require debt. With prayerful research, patience, and diligence many have earned college degrees without owing a penny upon completion. (Stay tuned for more on this next week.)
Both interpretations of Proverbs 22:7 agree that debt of any kind ties one’s hands. It limits one’s freedom until it is paid back. Debt, including student loan debt, makes the borrower a slave to the lender. Which means that student loan debt is not an exception to the biblical rule.