Debt is evil, and worse than that is usury, the charging of interest on a debt. The practice is condemned by all three Abrahamic religions. The Quran says that unrepentant usurers will be eternally punished (Al-Baqarah 2: 275-27), in the Torah it is forbidden to charge interest to the poor (Exodus 22:25) and in the New Testament Christ himself says to lend expecting nothing in return (Luke 6:34-35). Eastern religions also address usury, it is criticized in Buddhist texts and the Hindu Vedas.
Somehow, though, in our society criticism seems more often to find the borrower than the lender or the usurer, even when those same lenders and usurers, through their irresponsible practices, caused the worst economic disaster since the Great Depression.
But let us return to the present year. The Federal Reserve reported that at the end of 2015 the total outstanding debt of U.S. citizens amounts to over $3.5 trillion. Of that sum, credit cards represent $936 billion, 26 percent, and car loans represent a full 29 percent — one trillion dollars. Well more than either of those is the value of outstanding student loan debt, which, in total, is just over $1.3 trillion dollars, 37 percent of the total consumer debt.
The Institute for College Access and Success conducts studies of student loan debt in the U.S. using data provided voluntarily by public and non-profit 4-year colleges, of which their 2014 report states more than half participated. In that year, seven out of ten graduating college seniors in the U.S. had student loan debt, averaging $29,950 per student. The report also states that UTSA fell slightly below the national average, with only two-thirds of students graduating with debt, averaging $27,337 dollars each.
There’s a lot of stress associated with this growing indebtedness, I blame the puritans. And capitalists too. The notion that we redeem ourselves and earn our places in society through hard work is, after all, a puritan ideal. But should a college education be, as it currently is, a calculated risk?
Sociologist and political economist Max Weber wrote of the connection between the two ideologies in his work The Protestant Ethic and the Spirit of Capitalism, claiming that protestant values, such as the puritan work ethic and the Calvinist notion of predestination, shaped the development of industrial capitalism. This is somewhat in opposition to Karl Marx’s Dialectical Materialism, which claims that things were the other way around, that is, that economic conditions shaped social and religious development. This idea is somewhat represented by the famous quote attributed to Marx: “religion is the opiate of the masses.”
The point here though, is that regardless of which shaped the other we’ve moved on from puritan values and we’ve moved on from early industrial values; it’s well past time we moved beyond the equally odious practices of usury and debt.
How to do all this, admittedly, is a bit more complicated. Current social and economic structures are built around the use of debt to a pervading degree, and so I’m not suggesting that we immediately outlaw the practice. In fact, what I advocate is not a change in law, but rather a change in values, a move from Ayn Rand’s objectivism to a more egalitarian altruism.
Interest as it is currently implemented provides an incentive to loan money. However, looking at it from another perspective, one might see a loan as an investment in society. For example, student loans — representing more than one-third of the current public debt— could be seen from this angle easily. So easily, in fact, that we already have a publicly funded education system. Therefore, extending this system to include four-year public universities would be a valuable public investment that might also improve social mobility.
But if that’s not radical enough, Marxists — obviously — have compelling arguments about the rightful ownership of property, often boiled down to the phrase “property is theft.” In the context of housing, this means that the need of a person for shelter has greater weight than the need of a property owner for rent money.
Ownership as a principle requires the use or threat of violence to enforce, and is unethical. In this context, debt — an abstract form of property — collecting interest is the white-collar equivalent of armed robbery, wherein the weapon is the ability through financial hardship, to ruin your entire life.
That’s pretty heavy, but it’s not so bad. NPR Ed has some helpful articles regarding student loan debt. The Consumer Financial Protection Bureau also has student loan resources that can be of use, and, a personal favorite, Dave Ramsey can help get your whole fiscal house in order. Check out his books for free from the San Antonio Public Library system. Tens of thousands of dollars in debt is a lot to deal with as you’re beginning your adult life, but there’s hope.
Don’t worry too much, seriously, you’re not alone.