I work with college students at our church and I get asked questions about student loans all the time. I figure it is a question well worth answering on the blog. So:
Would the Bible condemn or condone the student loan?
Well, unfortunately, the practice of borrow money to complete your undergrad or graduate degree wasn’t exactly common practice in the first century so we can only surmise. The simplest summation of the Bible’s teaching on borrowing is: “The borrower becomes the lender’s slave.” (Prov. 22:7). The Bible consistently addresses the bondage of debt and warns the leverage-prone to wisely avoid the “slavery” debt can create. So, first we must recognize that answering this specific question is not a black and white issue.
In light of the Bible strong warnings, the high school senior, struggling student, or ambitious employee must be wise before borrowing for school. I offer the following:
5 Rules to Consider Before Taking Out a Student Loan:
1. Try to find a way to get your education debt free. Many students simply assume they have to borrow money to get an education. There are plenty of scholarships, programs, and incentives for students unwilling to leverage their degree. At least investigate the possibility.
2. Work during school. I promise, you will survive. Even if you don’t make very much, working during school will: help remind you why you are going to college, allow you to minimize or eliminate the amount borrowed, force you to be a more diligent manager of your time, and can create a better resume when trying to land your first job.
3. Run a cost benefit analysis. Does the opportunities created by your degree justify the expense? Compare how much you are borrowing to the benefits the degree creates. For example, borrowing 100k to get a humanites degree from a small, private liberal arts college versus borrowing a 100k to become a Doc are two different scenarios. Think about what you are borrowing and what you are getting.
4. Public versus private. Sorry, the numbers just don’t work: Private (and out of state) universities only make sense for parents who set aside for their kids education. A degree from a private university often costs 3-4 TIMES as much as a comparable degree from a public university. And, last time I checked, employers aren’t divvying out 3-4 times the salary for those who went to a private university.
5. First paycheck frenzy. When you finally land your first “real job” your paycheck will make that coffee shop you worked at look like a joke. There is a tendency to go hog-wild (financially speaking that is) when you begin at your first salaried job. You are making more money than you ever have and often college grads run out and get a new car, house upgrade, and other expensive purchase to “make up for” living on ramen noodles in college. If you can force yourself to keep living like a college student for 1-2 years, you can often pay off your entire student loan. (That is, if you followed the rules outlined above!)
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