5 Reasons People of Faith Should Care About Student-Loan Debt
SOURCE: AP/Toby Talbot
From Mother Teresa to Martin Luther King Jr., people of faith have long advocated on behalf of the economically disadvantaged. Religious Americans have, in fact, often been strong defenders of the dispossessed, especially in times of economic crisis.
Our country is currently staring down one such crisis: If Congress does not act by July 1, interest rates on millions of subsidized federal student loans will double from 3.4 percent to 6.8 percent. This would add an average of $1,000 per year to the debt burden of the country’s almost 8 million students who borrow.
Allowing interest rates to double on federal student loans unfairly affects the current generation of students already struggling with student-loan debt. A record 19 percent of all households reported owing some amount of student debt in 2010, up from 15 percent in 2007. The amount of debt is also increasing: The average amount of debt per student rose to more than $27,000 in 2012, compared to $17,233 just seven years ago, burying millions of graduates under bills they cannot pay.
With such a massive crisis brewing and with legislation on the line, religious Americans can help by lending their moral voice. We must demand that Congress pass legislation by July 1 that addresses the issues within the current student-loan system instead of doubling the loan interest rate for millions of cash-strapped students.
Drawing upon shared values such as equality, family, education, and fairness, the Faith and Progressive Policy Initiative has compiled five reasons why people of faith should care about the student-loan debt.
1. Student-loan debt preys on the most vulnerable and worsens inequality
Virtually every religious tradition calls on the faithful to care for those who struggle. And while student-loan debt affects Americans from all walks of life, it has an especially corrosive influence on our nation’s most vulnerable. A 2012 study found that students from lower-middle-income families—with incomes between $40,000 and $59,000—borrowed $12,000 more on average in 2010 than families with incomes greater than $100,000. While these lower-income families accrue more debt than wealthier families, they also struggle twice as hard—and work twice as long—to pay it back.
Student-loan debt also disproportionately hurts women and students of color and propagates inequality. A study by the American Association of University Women found that women with bachelor’s degrees not only earn less money than men with the same education level, but even when men and women choose the same major, “women still often earn less than men do one year after college graduation.” The result is a further widening of the pay gap as women are forced to use a greater percentage of their income than men to pay back their debt. Meanwhile, a 2012 report by Campus Progress found that 27 percent of African Americans with bachelor’s degrees reported more than $30,500 in loans, as compared to only 16 percent of white bachelor’s degree holders. In addition, 69 percent of black students who left school without finishing a degree said that creeping student-loan debt influenced their decision, as opposed to 43 percent of white students.
2. Student-loan debt is robbing a generation of opportunity and the chance to raise a family
For many religious Americans, the family unit is a crucial part of spiritual and congregational life. But for many students, the burden of student-loan debt is stalling the jump into family life. According to a 2012 Pew study, more and more college graduates are delaying getting married and having children until after they have paid off their debt—a process that can take decades.
What’s more, student-loan debt is denying younger Americans access to opportunities and the economic security that their parents enjoyed just a generation ago. In part because of overwhelming student-loan payments, many college graduates with loans may be putting off buying houses, cars, and even basic services such as cable TV and Internet access until they can get their debt under control. Young graduates are also shying away from contributing to 401(k) plans, setting themselves up for financial risk later in life.
3. Debt keeps graduates and religious aspirants from pursuing the careers for which they trained
It is bad enough that student-loan debt forces many college graduates to spend years paying off loans, but debt can also prevent them from getting a job in the first place. According to a study by the Society of Human Resource Management, 13 percent of employers currently conduct credit background checks on all job candidates. If an applicant has been late on payments or defaulted on their student loans, companies may turn them away at the door. This ensnares graduates in a vicious cycle: They need good employment to pay off their crushing debt, but their debt may keep them from getting a decent-paying job.
The situation is even worse for Americans seeking to join Christian religious orders to become monastics or nuns. Most orders mandate that applicants be debt free before joining their ranks, leaving many financially incapable of pursuing their spiritual calling. A 2010 survey found that 42 percent of young people who tried to join religious orders were rejected because they were “too poor to take the vow of poverty.”
4. Seminary debt is crippling the careers of thousands of seminary students
Student-loan debt is also hampering the futures of many seminary graduates who wish to become religious leaders. According to an ongoing study by Auburn Theological Seminary’s Center for the Study of Theological Education, roughly 62 percent of seminary and rabbinical school students graduate with debt—an average of $22,260 per student. Eliminating those who did not borrow, the average amount of debt per student is about $36,000, with the top 10 percent in excess of $72,000 and some with more than $100,000—all of this is often in addition to undergraduate debt.
This crippling debt can stifle the careers of tomorrow’s faith leaders. According to a 2005 study by Auburn Theological Seminary, the average Protestant clergy member serves a church with 100 or fewer congregants and makes an average salary of around $30,000 to $40,000. A $40,000 salary could support no more than $26,300 in student loans at 4 percent interest in a standard 10-year repayment, and it is highly unlikely that a new clergyperson would find a starting salary anywhere near that much.
5. Debt forgiveness is a religious issue
Although religious texts do not tackle the specific issue of student-loan debt, the broader call for debt alleviation and forgiveness cuts across faith traditions. Both Jewish and Christian scriptures include the concept of Jubilee, the ancient Jewish practice of forgiving debt every 49 or 50 years as described in the book of Leviticus. Biblical writers called for all debts between Jews to be erased during this time period, and any believer sold into slavery was released from bondage, regardless of whether or not they had worked the amount of time promised.
Other faith traditions also preach staunch opposition to debt. Islamic law forbids believers to lend or borrow money when interest is being charged, making many modern forms of borrowing inherently sinful by default. In addition, the official Mormon website includes an explicit warning against the “bondage” of debt, and Buddhist leaders such as Ven. Bhikkhu Bodhi have publicly connected their activism around student debt to their religious beliefs.
A modern world devoid of debt or interest is obviously a difficult thing to imagine; religious Americans who pray and protest for sweeping economic change know they have a long way to go before true economic equality becomes a reality. In the meantime, however, people from all faiths—or no faith—can agree that burdening a generation of students with crushing levels of school debt is not only unfair, it is immoral.
As the debate over student-loan debt continues to rage on Capitol Hill, people of faith must continue to speak out on behalf of the economically vulnerable. Both political parties, as well as advocacy groups, are offering various proposals on how to tackle this problem. It is crucial that Congress pass legislation that keeps current student-loan interest the same instead of letting rates double on July 1.
Religious Americans have a unique opportunity to partner with justice allies and sound the moral clarion call for a fair student-loan system that stays true to values that all Americans hold dear—religious or otherwise.
Jack Jenkins is a Senior Writer and Researcher with the Faith and Progressive Policy Initiative at the Center for American Progress. For more on this initiative, please see its project page.
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