The bill is aimed at helping borrowers like Dan Lozer. Twenty-five years ago, Lozer borrowed $15,000 in student loans to attend divinity school. He has paid back much more than that, yet he still owes nearly twice as much.
Lozer has never been paid more than $25,000 a year.
In his job, he counsels cash-strapped parishioners. He works at a soup kitchen, and he buries the souls of those who died with nothing in the pauper’s cemetery by the river.
Lozer, too, knows he will die in debt.
By the time Lozer was supposed to begin repaying his student loans, he was only earning minimum wage. His student-loan bills were nearly half his income. He couldn’t pay them, so he fell into default.
He has been there ever since. Because he was in default, the government could garnishee his wages, seize his tax refunds, even take his Social Security checks. It means he can’t borrow money for a house or a car.
I heard this story on NPR last week, and I must confess that while I have sympathy for Pastor Lozer, I’m not sure how he got into such a pickle. If you have Stafford (government) loans, you can usually work out deferments and lowered payments–much more doable than with other types of credit. I speak from my own experience and that of my children.
That said, there is a real issue with the cost of higher education and the availability of financial aid. The average grant and loan package covers only a fraction of the cost of even state schools in some parts of the country. At a time when a college degree is even more necessary than ever, it is increasingly difficult to afford one.
Banks will gladly loan med and law school students hundreds of thousands of dollars, knowing that they will have more than enough income to repay the loans. Not so seminary students. I believe that when a church sends a person to seminary, they need to make the commitment to fully fund the event. It might sharply reduce the numbers going into ministry (is that a bad thing?), but it will certainly increase the commitment level of all parties.
Working out deferments and lowered payments on Stafford loans is what makes this pastor’s situation what it is. The interest never goes away even if the deferment or the lowered payment takes effect. It’s a vicious cycle.
One gets the payment lowered to a place he or she can afford and then instead of it being paid off in ten years as required it is paid off in 20 or 30 because the interest continues to accrue. It’s like having a credit card that never goes down, but only increases.
This is made worse when student loan interest rates jump up as they recently have done. Instead of making progress with the lower rate, it suddenly gets worse.
Similar situations are faced by teachers and social workers, among others. Only in the case of teachers and government-employed social workers, they can organize and bargain for higher wages through the collective bargaining process. Pastors and other non-profit employees have no such recourse.
The road to hell is paved with good intentions, and the government’s student loan program represents yet another example. Young people should not be starting careers with thousands of dollars in debt. There are a whole host of other social and economic externalities that have resulted from government involvement in education, and the only solution is to abolish all state involvement in education.
I work for a non-profit legal aid corporation that is in a student loan repayment subsidy plan. Legal Aid lawyers do not make enough to pay off their loans either but that helas a lot. Why don’t priests dioceses and churches cook up a similar way to help priests retire such debt? Without that he just needs to take care of the debt, period. I recommend that the priest tune in to The Dave Ramsey Show [a nat’l syndication] and learn how to be debt free. He can probably access it on the internet. That is the best christian money management presentation I have ever heard. He needs to just pay off the loan even if it means 2 or 3 jobs. He never should have let it go this far, frankly, government culpability etc notwithstanding. This guy just ought to take care of it.
Usury – the taking of interest on personal debt – used to be considered a sin. Dante (whose world view mirrored that of the medieval Church) placed usurers, sodomites, and blasphemers in the same circle of Hell.
Maybe the medievals were right on this matter. Certainly, the burden of student debt would be far less if the loans were made without interest.
Lee
Taking on student debt to finance an education is a business decision. It should not be done where the expected salary from the new profession will not be sufficient to service the debt, such as clergy, teachers, etc. This person acted foolishly. Having said that, he needs to get a better-paying job or second job and fulfill his commitment without further delay.
#7:
I agree that it’s short-sighted to take on debt without having some idea about how one will pay it off.
But on the other hand, if the only people who go to seminary are those who are able to afford tuition independently, does the priesthood then become the exclusive domain of the wealthy? That doesn’t sound like a good idea either.
It’s a hard problem, to be sure.
#8 Ross
That is why it is important to fund the people we send to seminary. Seminary is hard enough without having to work several jobs and wonder about next week’s groceries. I have sent three people to seminary over the years and remembering how we struggled, I made my vestries commit to their education’s cost.