Forgiveness: Loan Edition

 

Of late, the news is awash in student loan forgiveness plans. 

I’m not terribly interested in the details. I simply note that the opposition seems to miss the point. Many student loans are unjust by their nature, increasing endlessly due to interest capitalization that leaves people owing more than they borrowed even after years of making payments. 

It does no good to complain that forgiving outstanding loans in 2023 isn’t fair to the people who paid off loans in 2015. The issue is that both loans were unjust, and eliminating the abuse is more important than being afraid to play favorites. 

As for the “you signed the papers” argument, that is highly debatable. Many people incurred student loans when they were basically children. Barely legal adults, they had no experience managing money and little possibility of understanding the life altering consequences of such debt. Moreover, they lived their entire lives being told by every authority figure that their life to that point was all about preparing them to go a “good school” so they could get a “good job.” In such circumstances, can we really say these people validly consented to take on their student loans? 

Regardless, every Catholic should recognize that consent is not sufficient to make an action morally right. This does not just apply to sex. Usury is always wrong because it objectifies the human person and turns him into a financial object, just as pornography turns the human person into a sexual object. 

Morally, it does not matter that forgiving student loans may create perverse incentives to unwisely pursue higher education, or it may increase inflation, or it may unfairly reward certain high income earners. Such reasoning is consequentialism, which denies objective morality, instead trying (and failing) to judge the rightness of an action based on its consequences. 

We can’t know in advance all of the consequences of forgiving various categories of student loans. What we can know is that many of them were unjust from the beginning, and that the lender (whether the federal government or another) has the just authority and the duty of redressing these abuses. 

Anyone who has read Leviticus, Deuteronomy, and Isaiah is aware of Divine mandates to forgive debts and to release debtors from prison. Better late than never.