Are School Loans an Acceptable Form of Debt?
Question from a reader:
A new study shows that 70% of college students will graduate with student debt (on average over $35K). Yet, I don’t hear much commentary from our churches about this. Given the high cost of education today, what Biblical principles can help us approach student debt in a God-honoring way?
Answer from Randy Alcorn:
The New American Standard Bible translates Romans 13:8 as "Owe nothing to anyone." This would appear to prohibit debt. The New International Version reads, "Let no debt remain outstanding." This translation would allow debt, but insists it be paid off as soon as possible.
Hudson Taylor and Charles Spurgeon believed that Romans 13:8 prohibits debt altogether. However, if going into debt is always sin, it's difficult to understand why Scripture gives guidelines about lending and even encourages lending under certain circumstances. Proverbs 22:7 says “the borrower is servant to the lender.” It doesn't absolutely forbid debt, but it's certainly a strong warning.
If you’re considering going into student debt, I encourage you to seek the Lord’s will through the reading and study of His Word, prayer, and the wise counsel of others before you make the decision to take out a loan. (I emphasize "wise" to discourage you from seeking counsel from someone who believes that debt is normal and no big deal.)
Often, there are ways to avoid debt or at least excess debt while in school. This might include choosing a less expensive college, attending a community college for two years before transferring to another school, working while in school, living at home, and evaluating your lifestyle standards and making changes accordingly. (Where in the Bible does it say we should go to an expensive university rather than a community college?) But by all means, seek the Lord and give God the opportunity to provide through supernatural means before you take out debt. (In this article, I share some self-examining questions about debt as well as Scripture on the subject.)
If you’re already dealing with paying off student debt, realize that to change the direction of our lives we need to prayerfully make wise decisions. Nothing is wiser than giving first to God, cutting back our expenditures wherever we can, and systematically paying off our debts to others, having placed ourselves through our faithful giving under God's blessing instead of His curse. (On my blog, I share some thoughts about giving while paying down debt.)
See also chapter 17 in Money, Possessions, & Eternity by Randy Alcorn