Christians and Student Loan Forgiveness

Last week was not a banner week for Christians in the media. Unbelievers were calling out the mean-spirited, envious, judgmental posts by Christians about Biden’s plan to ‘forgive’ student loans.

Even if what Biden is doing is unconstitutional and fiscally wrong, it made my heart sad to see self-righteous and unmerciful sentiments posted by people I know to be Christians.

A couple of cringey examples below.

https://time.com/6208577/student-loan-forgiveness-republicans-christianity-bible/

I know Jesus was not happy with his church. Meanwhile the data analysts are keeping track of everything that is said on social media. They LOVE it when the public is divided!

I knew this was not going to be good even before the negative posts about Christians started. I needed time to process just exactly what was wrong about those posts, but it finally came to me. These people were acting like Pharisees and the world was going to know it.

They were saying things like “I paid my loans, why should I have to pay yours?” and “I shouldn’t have to pay for your bad decisions or irresponsible life choices.”. While this may be true in principle, this is not showing love or grace!

JESUS FORGAVE OUR SIN DEBT. A debt we had no way of paying back. Let us never forget this and always remember to show mercy to others.

Here are several truths:

  • Our government is paying out billions to private, for-profit companies for climate-related business development.
  • Multiple industries are subsidized by our tax dollars including public schools, healthcare, oil and gas and other energy-related businesses, farming, highways and bridges, and communication.
  • Our government sent billions to Ukraine and we have no idea what is actually happening there or what is going on behind closed doors.
  • Note: This does not apply to most student loans since 2010 . Our government set up the student loan program that guarantees BANKS will get paid, and allows BANKS to keep charging daily compound interest FOREVER! There is no limit and your paycheck and government checks including Social Security can be garnished if you are in default.
  • Our government basically works for the banking system.
  • People who default are usually having serious financial difficulties. No one wants to be in default. This means that people who can least afford it are having some of their meager income taken to pay BANKS compound interest.

It’s not surprising when unbelievers act in envious and judgmental ways when someone gets an undeserved break from a debt. But Christians should not be like this.

The real solution is to put a limit on how much interest banks can charge on student loans, forgive the ones that are over 20 years old, and stop giving loans to students who are not taking courses towards a degree that actually has jobs available.

The student loan industry was supposed to help more people be able to go to college so they can get better-paying jobs. Instead it became a very profitable business for banks.

Let’s look at a Bible story about mercy before we go.

The Woman Caught in Adultery

1But Jesus went to the Mount of Olives.

2Early in the morning He went back into the temple courts.a All the people came to Him, and He sat down to teach them. 3The scribes and Pharisees, however, brought to Him a woman caught in adultery. They made her stand before them 4and said, “Teacher, this woman was caught in the act of adultery. 5In the Law Moses commanded us to stone such a woman. So what do You say?”

6They said this to test Him, in order to have a basis for accusing Him. But Jesus bent down and began to write on the ground with His finger.

7When they continued to question Him, He straightened up and said to them, “Let him who is without sin among you be the first to cast a stone at her.” 8And again He bent down and wrote on the ground.

9When they heard this,b they began to go away one by one, beginning with the older ones, until only Jesus was left, with the woman standing there. 10Then Jesus straightened upc and asked her, “Woman, where are your accusers?d Has no one condemned you?”

11“No one, Lord,” she answered.

“Then neither do I condemn you,” Jesus declared. “Now go and sin no more.”

John 8 Berean Study Bible

I know that there are many issues going on here, but the important thing is not to bring dishonor to God. We have to be so careful in these last times when people are leaving the church in droves.

What do you think? Did you see ugly posts or did you write or share anything about this topic? Do you have any regrets?

24 comments

  1. I’m with you on this! Pretty sure Pres Biden is making bad decisions and running our country into the ground, but if someone can figure out how to benefit from it, more power to them. I hope a few people get some debt removed!

    I also think this was intended to create division, to trigger resentment and envy, so Christians and conservatives would act all judgmental and mean on social media. So in addition to it not being a good reflection of our faith, people are also allowing themselves to be manipulated and used. One of my favorite sayings is, “don’t be a useful idiot.”

  2. I vehemently disagree with your arguments in this post. I think you are wrong on both the facts of what Biden’s action even does and on the theology.

    First, let’s start with the facts. Biden is not able to forgive just any kind of student debt. He only has the ability to adjust *federal* student loan programs. Federal student loan programs are stupid – in the sense that, in most cases, they represent a bad social investment and promote the “you need a college degree to land any kind of job” mentality – but they are far from being financially predatory. They are provided to borrowers at a steep interest rate discount to any loan they could hope to get at a commercial bank precisely because they are funded by taxpayers borrowing in the Treasury market – by definition, the lowest interest rates in the world, as the US Treasury is considered “risk-free.” Predatory student loans – the kinds of loans with ultra-high interest rates (that reflect the actual financial risk of lending to an 18-year-old gender studies major or poor kid that is unlikely to even finish the college degree program they are borrowing money for) are not made by the US Treasury. They are made by private banks and the people who have them will remain stuck with them.

    Second, the fact that student loans are mostly excluded from bankruptcy proceedings is not a form of corruption. There is a real, honest financial logic to it. Try putting your own pocketbook in the place of the commercial bank’s for a second. Would YOU make a long-term loan from YOUR OWN FUNDS to a young adult with no income history, no credit history, and no collateral? Yeah, no, a bank would not either, without some steep protections on their place in the pecking order for whom that young adult has to pay when they eventually do have an income. That’s the only reason the banks are willing to make the loans in the first place, and without such seemingly anti-social provisions, the only student lender in existence will be taxpayers. And that’s increasingly what is happening. Over $2 trillion of the Treasury debt outstanding right now has been used to fund student loans. And that’s before you get to all the government-funded mortgage programs, debt to Social Security, etc. The last thing most Americans can complain about is that their personal financial situations have been inadequately subsidized by their grandchildren. But, hey, let’s strap our grandkids with a debt jubilee on top of that.

    Third, on the matter of theology, there is certainly a commandment for Christians to be charitable in Scripture, but taxation is not charity. It is a demand that people pay money, whether they like it or not, whether they can or not, and that demand is made looking down the barrel of a gun. You spend a lot of time here talking about how great student loan forgiveness would be for the people who receive it, but precious little concern for the people who get to watch their taxes go up by thousands of dollars, who may or may not have those funds. People who barely clawed their way into the middle class. People living on a fixed income. Are they rightfully angry that they get to pay for someone’s bad decisions? You better believe it. Are they tired of listening to people say “you are so greedy, why won’t you give me your money?” You better believe it. Does the fact that they would rather save for their own kid’s college education than pay for someone who went to college, discovered income-based repayment schemes and stopped paying back their loans, who are currently enjoying a 3-year vacation (on taxpayers’ dime, because loan forbearance is not “free”),and is now complaining about how much principal and rolled-over interest they have outstanding, make them a bad Christian who is getting worked over by Satan? Are you kidding me? Why not argue that Jesus demands communism?

    Lastly, if this is the logic, then where should it stop? Am I a bad Christian for not paying off someone’s gambling debts? Someone’s payday loans? Those are sources of anxiety too. Those come with the inability to get out of a financial rut too. (I mean, if you think about it, student debt is the mother of all payday loans.)

    If you want a target for your jubilee, I would recommend the colleges and universities themselves, who are sitting on trillions of dollars of endowments that they manage tax-free like hedge funds while they jack up tuition every single year with literally zero financial skin in the game. Pushing student debt onto taxpayers is only increasing their rate of return and the moral hazard of this game. I would like to add that colleges booked millions and millions of dollars apiece from taxpayers during covid, and turned around and increased tuition after that. Why? Because they could. Run reckless over the country and let the “Good Christians” foot the bill. Sounds like cosmic justice to me.

    • Post-script: I really regret the tone of this comment, though I stand by the content. I like you a lot personally, and enjoy your blog, and know you to have a good heart. This particular topic gets me rather animated. Please do not be offended by the tone.

      • It’s fine. I expected and hoped to hear for you. These are all valid points . I did say that it’s unconstitutional and bad economic policy. I am looking at this from a very wide angle. In my opinion our whole economy is a house of cards right now built on many years of bad policies. Every president just kicks the can and makes things worse with more crony spending and social programs and the jobs keep disappearing out of the country. My main concern for this post was what I said about unbelievers seeing a meme or angry post and not considering all of the many reasons that that a Christian, like yourself, is against the loan forgiveness program. It is not a good look when Christians are already being painted as hypocritical and bigoted and uncaring. I also understand the part about being made that your taxes will go up. I provided examples of other equally bad reasons that our taxes are going up. However, I still believe that the student loan system as it is now mostly to provide money, as you said, to the colleges, not to benefit the public or the marginalized of society. A percentage will benefit from the help, but the colleges will get huge benefits. As far as your banking example, they should not be giving loans if they don’t like the risk. Questions: If the federal government ‘loans’ the money, then why does anyone have to pay it back? It’s just magic money tree money like the Covid money. Numbers in a computer. Also, I didn’t know that Obama had changed the student loan program to all federal loans. But many people actually do owe banks because originally student loans came from banks. My loans came from Citibank. Hope things are good with you!

      • I was thinking about how I owed you an email. My dad has been in and out of the hospital all month, and it has been all that I can do to not write a red-hot raging post about vaccines that will probably get me permabanned from WP.

        I just see all this stuff as Late-Republic shenanigans. The patricians and plebeians are fighting over who can best loot the treasury, which won’t even exist in due time.

        Two things I have always known about leftists are (1) they will never do anything that truly punishes the political donor class, and (2) they have no interest in removing anyone from poverty because playing to poverty is the sum total of their business model. This is a good example of both in terms of who would actually benefit.

        I am a good example of that. I am nominally a 1%er, but would qualify for the highest level of forgiveness under this program. I grew up in a working poor family in Los Angeles. I went to the worst of the worst public schools in Southern California, the kind where you have classmates that died in drive-by shootings. But as an autodidact, I gave myself a classical education on the side that postsecondary institutions respect. I ended up in an elitist college (i.e. known for its rich kids) in Texas by simple hard work. I worked my tail off in high school, landed my college’s top merit-based scholarship. I worked my way through college on top of that. I also received Pell grants and took out student loans to survive without income from my parents who were barely scraping by.

        When I left, I took a job at a top investment bank and the rest was history. I take the commandment to give to the Lord’s people in need very seriously. I give a lot of my income to charity and to fund church operations. But because of that, my accounting firm also gets me into a lower income tax bracket every year. This isn’t even an option for the 90% of taxpayers who cannot itemize.

        I could cut a check tomorrow to pay off my student loans, but I do not because I make more in the market on the cash than the interest on the loans and I make enough money that the existence of the loans will never impact my credit rating. In finance, that concept is called “net interest margin.” I have exploited it for a long time now, as someone trained in banking does.

        The idea that people who make far less money than I do would be on the hook for paying off my debt from forever ago just because I was math nerd that was good at playing the game is absolutely incredible to me. In a hyperinflationary environment on top of that. It seems like cruelty to me. But when selling public policy to voters, I am still that child of poverty. Twenty years ago, I would have been an example of why the system worked.

        I do not think my situation is all that atypical for people getting loan forgiveness under Biden’s program. I am the kind of person Biden wants to help, not the person who is stuck with truly difficult-to-pay loans. What is atypical is my politics. I came out of that background a conservative.

        On top of all that, the more the system is flush with cash, the lower academic standards get and the less the degree everyone is supposedly fighting over means anything at all.

      • I’m sorry to hear about your dad. Write the vaccine post! The truth is coming out. We just went to a funeral. A friend died in his sleep. Yes, he had cancer, but he died from COVID.
        You’re the kind of person we need making policy decisions. You are very financially smart and have good values . I have one of those traits, 😂. That’s an awesome success story . I bet your parents are so proud of you! Gotta run. Take care! 🙏 for your dad

  3. Good thoughts here, but I understand the frustration of the “Pharisees.” 😉 The bad part is pairing an economic concern with a specific religious view. There are plenty of not-Christians also frustrated with the illegal loan forgiveness.
    Which brings up another point; it is not just frustration with “I paid mine; why are you getting a free pass?” The issue goes beyond economics to abuse of power and illegal actions that are not allowed under the constitution.
    Beyond this is a more basic point of reasons for going to college. Far too much is written about decisions in life without bringing in how we make those decisions. For the Christ-follower, this should focus on how Father is directing one’s life, not on whether going to college is going to make one rich; are we following Jesus in all our decisions?
    Add to this the illusion that college grads will make more money than non-college grads. Trade schools offer great options at less expense and often have better career possibilities. The fault is in the students who just want money, and not Father’s will for their lives.
    Just sayin’. 😉
    ❤️& 🙏, c.a.

  4. During the Obama administration the student loans were taken over by the Federal Government. Very few people today take out loans from banks. There are too many people who believe a college education is the only path in life. Our youth are convinced a college education will guarantee success. It won’t. I am against Biden’s loan forgiveness for many reasons. First because it doesn’t address the root problems of colleges charging exorbitant fees. They are non-profits and don’t pay taxes, yet they act as for profit businesses.

    • The Obama administration did not quite take over all student loans. They took over future lending, not outstanding debt. I totally get what you are saying, but it’s an important distinction in this context. That was legislation that was out there and folded into the Affordable Care Act. Passed without any scrutiny whatsoever. Remember Nancy Pelosi saying “we need to read the ACA to find out what’s in it”? Yeah, the consolidation of student lending under the US Treasury was in it. I remember that time well, because I was working as a debt analyst in government, and we had a state nonprofit that made (good) student loans and had great counseling and forgiveness programs (particularly for teachers) that was put out of business by the Obama administration, with billions of loans sent into run-off. It shocked everyone.

      But all the “bad” loans were not and won’t be eligible for federal consolidation. They have nothing to do with this program and can’t legally. Even if you bracket off the legal controversies with what Biden is doing now, there’s no controversy that those loans are not affected. Even if they passed legislation to change the terms of those loans now, it would probably be fought to the Supreme Court and the borrowers would lose.

      But then, this will probably be fought too. I mean, what’s to stop the federal government from writing off federally-backed mortgages the next time an election rolls around and they need to buy a new demographic’s votes? Same deal. Best argument for why the government should not be usurping the role of a commercial bank in the first place. The temptation to shove it all on the faceless collective is too great.

      • My original debt from 4 years of college in the 80s was $25k. With interest, even after making payments for years before Grace was born, I now owe $69k because interest continues to accrue even if you are in Income based repayment or deferral.

      • Yeah, that’s what I was saying in my original reply. A HUGE part of this problem is simply the outright lies/disinformation that surround student lending, which have become almost impossible to cut through in the social media age. And the policy of forgiveness advances those lies instead of putting them to rest. There’s a generation watching this now that will sign on the dotted line with the assumption taxpayers will bail them out. None of this is real until it’s real.

        The concept of “deferral” is part of that. Don’t make payments now, we’ll just scoop and toss those payments into the later years of the loan. Makes it sound so easy, but the ultimate financial cost is enormous, even with ultra low interest rates with higher rates, it’s insurmountable). That’s simply how business math works.

        Most people would be surprised (even with a standard mortgage) how much total interest cost on a basic loan is. You take out a mortgage for 30 years and you are going to pay 3x the principal (at least) by the time all is said and done. This is the schedule of payments everyone passes over in closing because it’s boring math and legalese. This is what separates a capitalist from everyone else – they have capital, which means the time value of money works for them instead of against them. The value of cash vs debt is that instead of paying interest, you are reinvesting money and that investment is compounded… to you, not a bank. You borrow money from a bank and you are compensating the bank for all the other ways they could have invested that money (because when you take out a loan, the bank is investing in YOU). If you defer the payments for any period of time, or make discounted principal payments, you are increasing it even above that. That’s simply how loans work. Debt can be awful or a useful tool, depending on how you match it to actual cash flow. This is why credit analysis is such a big deal. So bad loans are not made.

        When I was in college 20 years ago, I knew people who were using the ability to borrow unlimited amounts of debt and defer interest to avoid going out into the real world (both psychologically and as a practical matter after the dot-com bubble burst). I knew a guy who had three Master’s degrees and was working on his second PhD. The college was going to sell him as many degrees as he was willing to sign loans for. Guy was approaching $200,000 in student debt, essentially just kiting money. (Kiting being where you take out new debt to pay for old debt ad nauseam. Or, colloquially, robbing Peter to pay Paul. This is one way student loans are abused. Another is using them to inflate one’s standard of living instead of paying tuition.) I remember having a conversation with him about this before I was even close to being mature enough to understand the business model of higher education. How are you ever going to repay that? He simply did not care. It reminds me of that joke from the Simpsons, where Homer is eating mayonnaise by the handful and drinking vodka, and Marge tells him it’s unhealthy, and he’s like that’s a problem for Future Homer, I’d sure hate to be that guy.

        This is not to suggest that everyone deferring loans is doing that, but it amounts to the same thing – people not internalizing that interest cost compounds and an industry that is totally cool with not explaining it to them in terms as crystal clear as “you’re screwed.” The last person on the planet who is going to explain this to you is a financial “counselor” at a college. And a lot of parents are sending their kids out into the world without telling them the facts of money. When the Obama administration consolidated student lending under the Treasury, they made sure there was no third-party in the mix to put the tough questions to folks about how they would repay what they owed. There was just the college (who stood to benefit from unlimited lending) and the faceless taxpayer cutting the check.

      • Thank you for that explanation. I really think you need to write and sell that Homeschool financial curriculum. Unfortunately my parents like many today were not financially savvy . I don’t think I mentioned my financial aid debt to my then-boyfriend before we got married. I had a degree and was self-employed when we met and I think he thought I had my life together. Oops! Then we basically lived that Homer life of being oblivious to the consequences of our life choices. You could say I’m a dumb smart person in some ways. I might do a podcast on this topic of people not understanding how loans work . Is it okay if I use some of your comments to educate people? Or would you like to be my guest? I could give you the floor and you can say whatever you want about debt and college and all that.

  5. So enjoyed reading the post and the comments. There are more than two sides to this debate. The third is the political side. I believe this was done to win votes in November. If the Congress could have come up with something that was better thought out and helped the people that actually needed the help, we would not be having this discussion.

    • The more I learn, the more I believe that the socialists probably knew that this would eventually be the end result of their corrupt loan system. Next step: free college for all.

  6. Forgiveness of debt is definitely biblical. The year of jubilee is in the Old Testament law. It’s not a good idea for governments to have a huge proportion of their citizens in debt slavery. Biden isn’t going far enough. He should forgive all student loan debt and erase it as if it never existed. That will help the economy by reversing inflation. Sadly, that is not what he will do. Still, it will help many struggling people.

    • I am confused about the whole thing. If the government is forgiving the loans, then shouldn’t forgiveness mean that NO ONE pays them back, not that they get passed on to other people? But, yes, forgiveness is definitely Biblical.

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