Forgive us our student loan debt

Butch Dill AP In this Saturday, Aug. 6, 2011 file picture, students attend graduation ceremonies at the University of Alabama … Continued

Butch Dill

AP

In this Saturday, Aug. 6, 2011 file picture, students attend graduation ceremonies at the University of Alabama in Tuscaloosa, Ala. The number of borrowers defaulting on federal student loans has jumped sharply, the latest indication that rising college tuition costs, low graduation rates and poor job prospects are getting more and more students over their heads in debt.

We need to start taking student loan debt seriously, both as a troubling moral issue and as a ticking economic time bomb. By some reports, student loan debt in the U.S. will exceed 1 trillion dollars this year, more than the credit card debt of all Americans.

A whole generation of young Americans is at risk in this excessive borrowing. They fall further and further behind in “servicing their debt” because they have no way to keep up with the payments as many of them are unemployed or underemployed. They will delay starting marriage and families; they dare not take the risk of quitting a paying job (if they have one!) and starting their own business to create jobs, and they certainly cannot save to buy a home. They are trapped.

Jesus teaches his disciples to pray, “And forgive us our debts, as we forgive our debtors.” (Matthew 6:12) Forgiving debt is a moral issue. Forgiving some of the worst of this student debt is crucial literally to save this American generation.

President Obama has recently taken steps to ease student loan debt burdens. But the problem is too big. Some of this student debt needs actual legislation to deal with the whole system of the debt as Robert Applebaum calls for on his Web site, ForgiveStudentLoanDebt.com.

Applebaum contends that executive orders can only do so much. It will take legislation that covers predatory practices as well as other changes to the way student loans are structured such as how interest is compounded. Applebaum also argues persuasively that forgiving student loan debt will stimulate the economy.

The kind of moral equality that Jesus asks us to pray for in the Lord’s Prayer can be seen in Applebaum’s argument. Jesus calls on us to pray, “Forgive us our debts, as we forgive our debtors.” Forgive and be forgiven. Americans are tied together in this student debt debacle, and debt forgiveness will help the forgivers as well as those forgiven.

The American economy is also trapped in this cycle of more student borrowing and the mounting student loan debt. ‘Is this the next big credit bubble?’ asks The Economist. What happens to our fragile economy when this next house of cards comes tumbling down?

The #Occupy movement is part of this student debt crisis, both in terms of those who owe, and how some may choose do deal with their debt unless Congress acts responsibly.

Ask yourself, who’s at all the #Occupy camps? Well, some of those behind #Occupy are graduates with two and three degrees and no job. I met some of them on Michigan Avenue recently, walking the same way I was, toward a jobs rally at #OccupyChicago. Each young person had a hand-lettered sign around his or her neck. The signs said simply, $45,240, or $67,125, or even $102,000. They were wearing their outstanding student loan debt around their necks. They were heading to the jobs rally and #OccupyChicago.

Stef Gray is a recent graduate who can’t find any kind of job, is underwater on her student debt, and she’s trying to draw attention to her painful story. and the stories of others like her who are actually living merely as slaves to their debt. She calls this OccupyStudentDebt. Her story helps explain why student debt is such a catastrophic issue for young graduates.

Unveiled just before Thanksgiving, a national Occupy Student Debt campaign kicked off, asking borrowers to sign a debtors pledge to default on their loans after one million individuals have also pledged to default.

Default is not debt forgiveness. “Don’t Be a Dupe. DO NOT pledge to voluntarily default on your student loans,” Applebaum pleaded on Thanksgiving weekend. His view is that this ‘default in a huge group’ sets up a false sense of security, i.e. you’ll be with a million others and be protected somehow from the very serious consequences of default. You won’t. It’s also a false logic, says Applebaum, to think more defaults will result in substantive change in this student loan system when the currently already high rate of defaults has not done so. Applebaum is circulating a petition for signatures to deliver to President Obama and Congress to immediately forgive all student debt.

None of those calling for action on mounting student loan debt debates that there is a crisis. The division is over how to act: call for legislative action, or take action yourself. Those graduates I talked to on Michigan Avenue are being hurt from the huge burden of their debt, and they were despairing that their elected representatives would actually do anything to help them.

Currently, I’m advocating debt forgiveness. It is the moral thing to do and it is the right civic thing to do. This is what Jesus actually meant; real debts, real debtors, forgiving and forgiven. This is what government is actually about—of the people, by the people, for the people. We still have a chance to show young people that democracy can work for the common good.

Forgiveness. It’s the right thing to do.

About

Susan Brooks Thistlethwaite Rev. Dr. Susan Brooks Thistlethwaite is Professor of Theology and immediate past President of Chicago Theological Seminary. She is also a Senior Fellow at the Center for American Progress. Her most recent books are "#OccupytheBible: What Jesus Really Said (and Did) About Money and Power" and, as contributor and editor, "Interfaith Just Peacemaking: Jewish, Christian, and Muslim Perspectives on the New Paradigm of Peace and War."
  • dprpl

    Sorry – you were a DOPE for taking out a loan for a degree that had no future intrinsic value. The wages of sin are painful as you and others have discovered.

  • geezjan

    Then the lender was a DOPE too.

  • dprpl

    Nope. Factored into the loan cost at the time of purchase by the student was the fact that Student Loans can’t be discharged in bankruptcy. Change that fact and kiss affordable student loans for future generations good by. Of course given that no one is actually taking classes that lead to skills for which an employer will pay that might not be a national crisis.

  • tm28

    Instead of a bailout perhaps the government should tie the student loan interest rate to US Treasury bills 30yr interest rate. After all, since the government just took over the student loan industry it is simply investing its citizens. The lower payments will also help drive growth as citizens have more income to drive consumer spending.

  • Cerulean

    When someone buys a house, the banks look at the ratios between wages and debt to calculate if you can pay it back. Student loan lenders should do the same; take a realistic earning figure and see what the ratios are. I suggest no more than 10% of income should go to paying back student loans. Then it is up to the student to figure out how to best make up the gap. One thing is certain, the bad habit many colleges have gotten into of raising tuition rates much faster than inflation will stop very quickly.

  • csmithw

    Just like with the housing crisis, people made a choice to take on this debt and received an education in return. Believe me, I know about student debt as I have a lot of student loan debt from both undergrad and law school. While it sucks, I am also grateful for it as well. If not for my Stafford Loans, I would not have been able to afford to go to college or law school. Would those objecting and complaining about their student loans rather not have access to the colleges and universities that attended? Would they rather enter the job market armed with a high school diploma? How else would they have paid for the education they received? Less we forget, these student loans make it possible for many people in the lower and middle classes to attend college and try to make a better life for themselves. Debt forgiveness would certainly benefit me, but I feel that everyone who received a loan that assisted them in attaining their college degree has a moral obligation to try to repay that loan. After all, student loans allowed me to be the first person in my family to go to and graduate from college.

  • bchin5

    The government is doing even better than that, the new law only requires you to pay 10% of your DISCRETIONARY income. I don’t know if lenders should be in charge of that since that would seem like limiting who may go to college. If you’re gonna be a writer or english major, sorry no loans for you.

  • bchin5

    I am in school and owe a fair share of debt but I AM gonna pay it off, because I said I would when I signed on the dotted line.

    Loan forgiveness would be nice, so would mortgage forgiveness, so would a big check for 50K to everyone in the US. But the people who are protesting are just plain irresponsible. Not just to the lenders but to the future generations. They will basically kill the student loan system forever! Would you lend 10K to anyone if you knew your return was 0? or even 5K? No one would be able to get a student loan.

  • bchin5

    Exactly!

  • rcvinson64

    Forgive me my mortgage too.

  • chenchuchi

    Student loan more than one trillion dollars exceeding total credit card debt. Wow! That’s real eye opener. With consistent 9% unemployment hurting mostly young people, we have a much bigger crisis brewing on the horizon.

    Contrary to contemporary wisdom, it’s immoral to forgive loans of any kind. The parables of Jesus mention many times that Jesus rewards the lazy (hired hand working one hour gets the same pay as the ones laboring 12 hours long), the decadent (prodigal son), the greedy speculator (the one who invest with higher returns get reward, while the fiscal conservative get punished), etc…

  • CivilLibertarian

    Susan Brooks Thistlethwaite: Typical “me-generation” narcissistic freeloading deadbeat.

    Gone are the days of any sense of personal responsibility and accountability; Everything is always someone else’s fault.

    You can thank the left-wing Liberal infestation of our nation’s school systems over the last 3 decades for such entitlement thinking.

  • barbaramusser

    You need to look at what your degree is in and what it can pay for. Yes, you have to make a choice between that degree in basketweaving you wanted and the one in chemistry that you didn’t want as much, but that’s what everyone has to do. That’s what my father did- saw that his first two loves, history and astronomy, wouldn’t pay that much and went for 3 or 4 on the list, chemistry, which could pay for all the others as hobbies.

  • crusoe

    Wow, I thought it was just about impossible to completely misinterpret Matthew 6:12. Thanks for proving me wrong!

    Delusional. Completely, utterly delusional. How about the wacky notion that Jesus might have been referring to sins – sins we’ve committed against God, and sins others have committed against us? Maybe?

    For future reference, word searching the Bible does not theology make. Unbelievable.

  • Rnjorge09

    Educating the ignorant youth and making them sign the dotted line without full understanding is predatory period.Seniors in high school should have a year long course instead of for example pottery class and explain in full detail all of the responsibilities associated with the loans and the pressures of repayment in comparison with the job market and career. Im a strong advocate tea keeping your end of the bargain but also search for justice. I’m sure many out there would have been willing to have worked one year for free as part of a baccalaureate or masters program in order to walk on stage for graduation debt free and with work experience under their belt ( I know I would).You cannot place full blame on someone who is ignorant and has not had socialization with the pinnacle of educators and life experience for yearning for a better life for his or her generations to come.

  • Rnjorge09

    Educating the ignorant youth and making them sign the dotted line without full understanding is predatory period.Seniors in high school should have a year long course instead of for example pottery class and explain in full detail all of the responsibilities associated with the loans and the pressures of repayment in comparison with the job market and career. Im a strong advocate tea keeping your end of the bargain but also search for justice. I’m sure many out there would have been willing to have worked one year for free as part of a baccalaureate or masters program in order to walk on stage for graduation debt free and with work experience under their belt ( I know I would).You cannot place full blame on the youth someone who has not had socialization with the pinnacle of educators and life experience in general for wanting a better life for his or her generations to come. I think the responsibility of the debt should be paid thru work prior to walking on stage.

  • Alecto

    “…until CONGRESS acts responsibly.” Lady, put down the crackpipe. The culprits here are the students who borrowed knowing full well these were loans, and the schools who jacked up tuition every year. As someone with student loans that have mushroomed over the past 10 years, but who is grateful to be able to pay them because I have a job, well actually a full-time and a part-time job, there is no biblical mandate to forgive debts. Why should taxpayers who have not had the opportunity to attend college pay anyone’s (including my own) student loans? Because THAT is what you suggest. Make those who did not benefit pay for those who did. That IS immoral. Stop trying to make this a religious issue: it is about the failed bankruptcy legislation of 1996 and 2005, and the subsidizing of higher education by Congress. Stop giving schools the ability to raise tuition 10-20% annually, and stop allowing people to borrow money with no prior credit history, or for Pete’s sake, allow the truly destitute to discharge their debts in bankruptcy and don’t give them more credit.

  • heffleyjr

    This is one sick lady.

  • twaldron9

    Forgive the debt, yes but…
    Have the colleges return the money to the lenders. Reduce the cost of education by having colleges terminate their tuition assistance programs, lower the salaries of all administrators, clerks, and, especially, professors. Colleges must be prohibited by law from raising tuition and other fees until costs are brought into line. If schools want universal education then they must make it available themselves without aid from the federal government (which primarily rewards those who reelect its members). In other words, we have bred a system that rewards those who control the school, not those who seek to benefit from an education.

  • malangthon

    One track to a resolution pens the people who can change things. How about a reasonable repay schedule; The obliteration of collection fees for collection companies who are often very unscrupulous; Placing the collection of government insured loans with the Dept. of Ed. who is supposed to be doing this anyway. This is a business that is destroying careers and an ever increasing educated workforce. There are thousands of US Citizens who are remaining overseas because they can not function here with bad credit.

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