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Normally I write about topics that can help each of us individually achieve a greater life.
But today I want to take a break from that to talk about something that affects a large group of people.
Student loan debt.
Student loan debt forgiveness is a hot topic right now.
And it should be.
We have 18 year-olds across the country taking on ever-increasing debt loads before they have any idea what they want to do with their lives. And they are taking on this debt with the expectation that the value they receive in return will be enough to pay it back.
In the business world, that’s the point of taking on debt. You take on debt not necessarily because you are in a bad financial position, but you take it on in the belief that it will provide you with value greater than the debt itself, making the transaction profitable for both you and your creditor.
Such is not the case for many taking on student loans today.
Many of these students take on this debt and in return receive an experience, the college experience, that does not necessarily monetize itself. They then stay stuck under the burden of this debt for many years in a lot of cases, not getting the monetary value in return that they thought they would.
Even though they held up their end of the bargain, earned their degrees, and maybe even contributed in a meaningful way to their schools.
College may have been a good experience for them, but the bank does not take that as a form of payment.
But student loans are not the only type of debt that burdens people in American society today. Medical debt is particularly burdensome as well, and in many ways much more nefarious as it tends to affect a segment of our population that lacks the upward mobility the younger generation does and, frankly, deserves our care for them.
So what is the solution? Is complete student loan debt forgiveness the answer? And if it is, what about the other forms of debt that are crushing people today?
I believe our focus ought not to be on one type of debt that we find particularly onerous, but rather upon our system of debt repayment than exacerbates the problem and contributes to tamping down many people’s prospects of prosperity.
What if we implemented a biblical system of debt repayment?
This would be interesting.
Why?
Because of all the causes and laws the “church” has taken up to defend and promote, one has conspicuously been placed in a corner to gather dust in the hopes nobody ever realizes it’s there.
Those would be the financial laws.
Sure, prosperity preachers for years have touted “give and you shall receive” as a financial imperative that filled their coffers, some genuine and many not. But there is another aspect of biblical financial law that has been all but ignored, and I believe I know the reason why.
The Bible is actually quite specific about how debts ought to be repaid. One of the main failings of the church today, and ancient Israel and Judah before it, has been the ignoring of this very important law that I believe can be not only useful to us today, but also solve our debt crises in a way that is equitable for everyone.
You see, there are some people who complain about other people having their student loans forgiven after they paid theirs.
I am not one of those people.
If I was able to pay off my loans, then that means I was in a blessed financial situation to be able to do so. Another person’s gift is not a detraction to me.
Should others have debt forgiven when I paid mine off, that is great. It helps raise up the whole society and I am happy for them and, by extension, me.
Now, back to this system that could raise up everyone.
Biblical law outlined time cycles as it pertains to debt collection and repayment. The fact that it has not been followed is an indicator of a scarcity mindset of mankind in general, and perhaps greed.
Here is how the cycles work, in general terms.
Every seven years was to be what some refer to as a “Sabbath rest year”. During this rest year, no payments were to be made on outstanding debts.
Now mind you, the debts were not forgiven in that seventh year. They were effectively put on hold, set to resume the next year, the first of the next seven year cycle.
Let’s stop and take a look at this principle for its merits.
What would taking a rest year on debts do for those who held them?
Well, first of all, I’m sure you can already see that they can use that year to save money, invest money, take care of other needs, etc. It gives everyone a “breather”, takes off some of the stress and pressure of being under that debt, and gives people the opportunity to use that extra wealth to augment their financial position, putting them in a stronger position to resume repayment of the debt in the next year.
Imagine if we all had such a benefit. That seventh year would be what some might call a “Godsend”.
Also imagine if just a single lender made this a part of their lending policy today.
Lenders, if you are listening, implement this policy and you will get ALL the business. It really is that simple.
Now, before we move forward to the second debt repayment law, let’s address a point I made earlier. Namely that being out from underneath that debt would relieve stress.
Studies have shown some startling correlations between debt and not only stress, but even cognitive capability.
Debt is literally attacking our health and our ability to function. Check out this report here.
In fact, just do a search for debt and stress and you will see just how much of a connection there is.
Now, ask yourself, if we can reduce the debt load in this country, improve the happiness of millions of our citizens, and renew their cognitive strength, what kind of ripple effect would that have? Across our economy and in simple relations between us?
I find the prospect extremely exciting and think we should try it.
Now for the second aspect of the biblical law.
The first one was easy. This one is, I believe, where people with their scarcity mindsets get fidgety.
The Jubilee.
The Jubilee occurs on the seventh seven-year cycle, or the 49th year. At this time, all debts are to forgiven, all people return to their lands, slaves freed, etc.
All. Debts. Forgiven.
I think you can see why some in high places hoped this law would never see the light of day.
Which is a shame, because such a concept is good for everybody. The economic health of those in the lower rungs of society can serve to augment the economic health of those in the upper echelons of society as well.
They are not mutually exclusive.
Some might need more capital to start new ventures, or use their existing capital to conduct more business, making economies stronger for everybody.
But it is my contention that those in leadership, or in charge of the money, never had such faith. They were not willing to give up their claims with the faith that they would come through stronger on the other side.
As such, they never fully followed this aspect of the law. One can debate the effects of this, but that is neither here nor there.
What is here now is us. And the question is, can we use this to our benefit?
I think you can tell that my position is yes.
Starting off with a system of placing a “hold” on debt repayments every seven years alone would be a boon to our society.
Every seven years, every citizen, regardless of what type of debt is held, gets a chance to not only get on their feet but get stronger. Use their capital to their advantage. Grow the greater economy and pay back those debts with extra capital they were able to make, all without the stress of being in debt for that year.
It’s amazing what removing stress can do for the body, the psyche, and our relationships. Everyone will be more productive and prosperous under such a scenario.
Jubilees might be harder for some to stomach, but they are infrequent. I also believe that after administering the first six cycles of debt “holds”, we will have seen enough fruit that releasing from debt in the seventh cycle will not seem as scary.
The evidence of prosperity will already be in by then and many people will likely be excited to take the next step to see how much more we can grow.
Again, lenders, you be the first and you get all the business.
Or we can do what we’re doing now. We can give out loans across the board to people who don’t know what to do with them, don’t need them, and have no way to pay them back.
Then take on the costly and antagonizing collection process.
Then wait until the unpayable debt load hits crisis levels and be forced to subsidize them with other people’s money, who may not have it either or feel they should have to part with it, creating more stress and animosity.
That system is virtually founded on negativity. Instead, we need a system where getting out of debt is not only encouraged, but built into it.
The biblical system of rest years and Jubilees, on the other hand, allows debt, but also puts all debt holders into a funnel that almost forces them out debt free. It is a system that encourages healthy debt that grows economies and personal lives and puts every debt holder on the path to debt freedom.
No crises necessary.
We’ve tried the other way and the results are in. More and more people are being crushed by it and the system offers no road out except for blowing it up and puffing it up again.
I think it’s time to try something revolutionary, something new yet old. Something to get us out of a never-ending debt cycle and into something that uses debt to build us all up, with release valves for everyone.
What do you think? Let me know in the comments below.
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*As always, this article is not meant to give financial advice. Past results are not a guarantee of future returns. Everyone must do their own due diligence and determine the money managing and wealth building strategies that work best for them. Information provided here is meant to provoke thoughts, not provide recommendations. This is not personal legal or investment advice and may not be appropriate for all readers. If personal advice is needed, readers should seek the services of a qualified legal, investment or tax professional.