Christian Financial Advice and Biblical Stewardship

Rethinking College Loans

  • 2007 6 Jun
Rethinking College Loans
WARNING:  This article isn’t going to be on how to get quick and easy college loans.  Like so much of what I teach in the No Debt No Sweat! Christian Money Management Seminar at churches throughout the country, I am not particularly interested in financial formulas that accountants and planners might suggest based strictly on what makes financial sense. Instead, I hope that we can focus on the spiritual implications of how we use and manage our money. 

When I see the stress and heartache many people experience, I am not very excited about borrowing money to go to college.  Recently Ken (*not his real name) confided in me about his and his wife’s experience with college debt. They had gone to a Christian college. Naively, they trusted their advisors who were continually encouraging them to borrow more and more money for their courses. I’ll never forget the look in his eyes and the words he said: “Steve, they’ve ruined our lives.”

Sure, I know just about “everybody” (not really) does it. And, no, I don’t think it’s necessarily a sin to borrow money for school.  But, I do think there is usually a better option. 

I can hear the gasps from readers that might sound something like this: “What’s wrong with that guy?” or “Doesn’t he live in the real world?” and “Who does he think he’s talking to—rich people?”

Yes, I do live in the real world — that’s why I’m so adamant about this stuff. And, no, I don’t think I’m talking to a bunch of wealthy folks. The people I’m aiming most of this at are people who have struggled all their financial lives — and, they’re sick and tired of it!  I may be suggesting some radical ideas, but in the long run, they are far less painful than the way you’ve been doing it so far. Sure, there are times when a school loan can make sense. But my suggestion is simply this: If possible avoid loans, find another way to pay for college; but if you do borrow money, borrow as little as possible — and pay it back with a vengeance!

The most convincing argument against school loans frequently comes from the 22-year-old college graduate who has just landed a job in his chosen field. Let's take a glimpse into this promising young grad's world. At the very moment when life should be the happiest and the future the brightest, this young adult runs headlong into Real-life 101. When he adds up all the education loans he’s obligated to, the total tops $60,000. Suddenly, the new $42,000 salary doesn’t look so big. A sizable chunk of the paycheck starts going to pay down his school loans. And since he’s already been trained to buy things before he can pay for them, it comes as no surprise that he begins buying cars, furniture, clothes, and even groceries with credit cards. By the time he turns 25, the college degree he bought on credit hasn’t produced a job that pays enough to keep up with the debt — and he’s in a spiral that destroys his peace and joy. He spends the next 20 years trying to catch up from the mistakes he made starting with college. By the time his own kids are ready to leave for school there’s nothing set aside for them. And now the question is, does he borrow to pay for their education or finally start saving for his own retirement? What a trap!

As you plan for college (or, any other financial event for that matter) remember the old adage:  "When your outgo exceeds your income then you upkeep with be your downfall.”

Read Part I of this series: Paying for College with a Reality Check

Next time: Eleven Steps to Successful College Funding

Steve Diggs presents the No Debt No Sweat! Christian Money Management Seminar  at churches and other venues nationwide. Visit Steve on the Web at or call 615-834-3063. The author of several books, today Steve serves as a minister for the Antioch Church of Christ in Nashville. For 25 years he was President of the Franklin Group, Inc. Steve and Bonnie have four children whom they have home schooled. The family lives in Brentwood, Tennessee.


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