The Student Loan Game

Two mountains of debt collide

Two mountains of debt collide

The NY Times reported today that student loans surpassed credit card debt for the first time ever, and it’s not over yet:

“The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Pell grants for low-income students are expected to be cut and tuition at public universities will probably increase.” (NY Times 4/12/2011)

Whatever will happen, “The mountain of debt” clearly marks a new economic era. It means college graduates are entering uncharted waters, marked with greater career uncertainty:

  • Excessive student loans do not mix well with a bad economy. “Hefty college loans carry extra risks in the current economy,” an Obama economic adviser said, because “in this economy, it’s a lot harder to go from job to job.” This is significant, because “early job changing is how you get those increases over [a] lifetime.”
  • No matter how large or unreasonable the loans are, there is no relief. High School graduates are not savvy enough to realize when they’re getting ripped off, yet banks and universities are roping kids into unreasonable debt. “Unlike most other debt, student loans generally cannot be discharged in bankruptcy, and the government can garnish wages or take tax refunds,” the report says.
  • Student loans are prolonging adolescence, because “the transition from adolescence to adulthood is being delayed, with young people taking longer to marry…and have children,” the report said, so “student debt is known as the anti-dowry.” It means college graduates are delaying or avoiding marriage.
  • Student loans will alter the overall economy for decades to come, since “student loans are going from a microeconomic factor to a macroeconomic factor,” the report said, increasing “overall household debt.” In the economic future, “people will still be paying off their student loans when it’s time for their kids to go to college,” the researchers who compiled the statistics claimed.

This newly-christened “mountain of debt” greatly increases the economic disadvantage launching Gen-X and Millennial generations into their careers. Baby Boomers (their parents) once could afford to “tune in, turn on, and drop out” for years as hippies, gradually return to college, and still enjoy the most prosperous era in American history. Their kids won’t enjoy such prosperity. The old hippies bequeathed a $14 trillion budget deficit and more than $100 trillion of unfunded entitlements—Social Security, Medicaid and Medicare—guaranteed to launch skyrocketing taxes, or inflation, or worse against their loan-strapped kids.

Baby Boomers never wanted to leave their kids economically disadvantaged. They abandoned their pot, wild dreams of hippie-freedom, and a counter-culture in orde3r to rejoin The System (while WWII-Gen parents smirked). They wanted to provide economically for their own kids. (“And we’ll be better parents than our parents were!” they muttered.)  Apparently the WWII Generation won the parenting contest.

The mistake was the hippies forgot why they rebelled. Baby Boomers not only trusted The System, they indulged in it.

Outlaws Needed!

“Do not be conformed to this World System, but be transformed by the renewing of your mind,” God said. His approach guarantees marvelous results, “so you may prove what the will of God is—that which is good and acceptable and perfect.” (Romans 12:2) God advocates an anti-conformist mindset through real spiritual transformation.

Jesus People become either conformists or spiritual outlaws, and the difference is called transformation, according to Romans 12:1. Student loans and college educations are not the source of the problem.  God strongly endorses wise career stewardship (Acts 20:35; Eph. 4:28; 1 Thes. 4:11), and higher education clearly helps. But the NY Times article demonstrates conformist thinking about college and loans:

“When you think about what’s good debt and what’s bad debt, student loans fall into the realm of good debt, like mortgages,” Professor Dynarski said. “It’s an investment that pays off over the whole life cycle.”

Hello! The good professor somehow forgot that our current economic catastrophe arose from “good debt, like mortgages…” Did not the housing market collapse in ‘08? The non-conformist, transformed version of his quote would say, “student loans might pay off, and mortgages might be a good investment.” The difference is an issue of trust—either trusting the World System to provide security, or God. Another way to put it:

Trust in your money and down you go! But the godly flourish like leaves in spring. Proverbs 11:28 (NLT)

Higher education is a high-pressure world of high-finance and (obviously) debt. High school kids are pressured to race immediately into college, race through four years of limitless debt, and graduate quickly. It’s a rat race.

KSU logo - truth in advertising

KSU logo - truth in advertising

When Congress exempted student loans from bankruptcy protection in ‘o7, banks swarmed across universities with bribes and sweetheart deals to obtain university-preferred lending status. It prompted The Student Loan Sunshine Act in ’08 to protect students (somewhat) from predators (like their own universities). Universities still automatically assign favorite banks (i.e., those with kickbacks) to students qualifying for loans. When students take out more loans than their career will easily repay (like a teacher’s salary), nobody at the university warns the kids.

Kids are clueless about what they’re doing, but the student loan game forces them to become “wage slaves” in a career possibly ill-suited for them, or a career unable to repay their mountains of debt. Christian kids are emerging from college fully-conformed to the World System, and settle into a mindless life of wage-slavery, which is expected.

Is this a system worth trusting?

Transformed Outlaws

The old hippies once rebelled against the World System because it required mindless conformity, which the Bible also says. When hippies became yuppies, they too became mindlessly-conformed, and the student loan game proves how enslaving it is. One NY Times reader said it well:

Convince them to go to college at ridiculously high costs, borrow the money at high interest rates, and then only have low paying jobs available so they spend forever paying it off. Result? A wage slave. (Chris, from Peoria, AZ)

Shouldn’t we be reading such comments from Christian sources rather than the NY Times? Jesus People should be liberators in a World System that creates “wage slaves,” not conformists. This is why Jesus was an outlaw, and why He was crucified:

“THE SPIRIT OF THE LORD IS UPON ME, BECAUSE HE ANOINTED ME TO PREACH THE GOSPEL TO THE POOR. HE HAS SENT ME TO PROCLAIM RELEASE TO THE CAPTIVES, AND RECOVERY OF SIGHT TO THE BLIND, TO SET FREE THOSE WHO ARE OPPRESSED, TO PROCLAIM THE FAVORABLE YEAR OF THE LORD.”
Luke 4:18-19

Palm Sunday comes this week, when Jesus presented Himself to Israel as God’s promised King of Kings and the liberator of Israel. As we all know, they preferred the World System over God’s Kingdom, and rejected the Messiah. Christians who embrace the World System with fervor and mindless conformity—those who believe its promises of security—also are not excited about God’s Kingdom.

To trust in God’s Kingdom means liberating captives. To emerge from college embracing God’s Kingdom, fervent about liberating captives, and trusting God for security is the epitome of the transformed Spiritual Outlaw.

And it’s pretty cool.

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6 thoughts on “The Student Loan Game

  1. Hakes

    Very cool article Keith, and I am always impressed by your efforts to bring in the necessary research.

    This issue of being a “wage slave” is something that haunts me. I am looking to be a teacher, and as you pointed out there is practically no hope for such a job to pay off such ridiculous loans.

    I am coming to the end of my second year in college, and the weight on my shoulders is almost $14,000. Also, I know for a fact I will not be able to graduate in four years. This is terrifying to bear alone, and my heart breaks for those who have to face this without knowing God.

    I do not know what is going to happen in my life, and I do not know how deep in debt I will sink. I do know, however, that God is with me, and that money does not matter. I know I am here for Him, and praise be His name for not leaving me in the darkness.

    Without a focus on the Lord there is no hope.

  2. Joel Hughes

    This is a great scam for colleges and universities. These institutions of higher learning get to the “customer” first, and by the time the customer graduates (or not…no matter) the rest of the economy finds that the victim doesn’t have a lot of blood left to suck. Bad for Wall Street, good for colleges.

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