Indebted to educationBy Celeste Kennel-Shank
Like many of us, I try to think carefully about how I spend my money, especially on larger items. I wouldn’t pay $30,000 for any amount of jewelry. I wouldn’t spend that to replace all the furniture in my house or all the clothes, shoes and accessories in my wardrobe.
And yet I have spent much more than that on my education.
After the recent transfer of my student loans from the original lender to another company, I spent the better part of an afternoon leafing through my past bills and trying to understand my current ones. When my frustration rose during a conversation with a representative of the new lender, I paused and reminded myself that the person on the phone with me was not to blame. She was a perfectly friendly person trying to be as helpful as she could given the constraints of her job.
While surely not the customer service representatives, who is to blame for the student loan predicament in which a growing number of people starting out in their careers find themselves?
“Two-thirds of college seniors graduated with loans in 2010, and they carried an average of $25,250 in debt,” according to the Project on Student Debt.
Some campus groups have taken up the cause of opposing the doubling of interest rates this year on one type of student loans, subsidized Staffords, which the federal government pays the interest on while students are in school or deferment.
Five years ago the government approved a plan to incrementally reduce the interest rate of this type of loans from 6.8 percent to 3.4 percent. If the plan is not renewed by its expiration date of July 1, an estimated 8 million students will see their interest rates double, according to the Don’t Double My Rate campaign.
Beyond this targeted effort, there are many students, of which I am one, who are already paying 6.8 percent interest on their Stafford loans, while other federally backed loans and even private loans may have lower interest.
What is a reasonable interest rate to pay? Should our communities be engaged in advocacy around interest rates, and if so, directed toward whom? Are our Anabaptist colleges and seminaries adequately educating students and their families on the full costs and benefits of taking out loans?
Student debt can make it more difficult for young people to consider a term of service after college. While government-backed student loans can often be put into deferment during a service term, private ones sometimes cannot. Further, while some kinds of service work are eligible for student loan forgiveness programs and education awards, because of the same separation of church and state that is helpful to Anabaptists in other areas, there are additional restrictions for service to a church.
Even for those who find a way to manage loans while doing voluntary service, there can be greater pressure to get a job with a higher salary afterward, as student loan payments must be added into budgets along with housing, food and other needs. Living frugally is sometimes not enough to make ends meet on the salaries offered by many service-oriented organizations, especially for those living in urban areas with higher costs of living.
Whatever our circumstances, in our churches we can look together at how much money we are spending on education. We can ask how we want to engage with our society’s lending and borrowing practices. We can do this while seeking to bring our economic choices in line with the desire to live in the ways of God’s reign.
Celeste Kennel-Shank is a minister and community gardener in Chicago.
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