I agree that legally speaking, conditionality has been introduced into the lender-borrower relationship. But its not clear that this carries over into the underlying ethical nature of the relationship. This is a distinction we are comfortable in other types of relationships - does it apply here?
To take an example from medical ethics, entry into motherhood establishes an underlying relationship between mother (as protecter, nurturer, provider etc) and child (as dependant, recipient, beneficiary etc). The introduction of a law that applies conditionality to this underlying relationship (e.g. mothers are only required to care for a child after x weeks from conception) does not change the underlying ethical nature of the relationship.
Similarly in the field of sexual ethics christians don’t reduce ethical considerations to mere legality. When we ask whats ‘good or ‘desirable’ in relationships we ask about more than what’s legally permissible
Does a similar framework apply to financial relationships?
Entry into a loan program establishes a borrower-lender relationship (by contrast, entry into a grant program would establish a donor-recipient relationship). Legal introduction of conditionality is one thing. Asking what’s good or desirable may be another.
Let me be quick to add, this is not to be critical of theological colleges, or students accessing FEE-HELP. We can be thankful for FEE-HELP as it helps colleges, and students, to provide and access theological education respectively. And colleges can promote the responsible use of a loan mechanism like FEE-HELP in good conscience. What I’m cautious about, is advocacy of entry into FEE-HELP with no, or weak, intent to repay.
Also, advocacy of repayment of debt as ethically desirable is not to put more pressure on cash-strapped theological students. Indeed, it provides an opportunity for diocesan structures, for churches, and for individuals to support theological students to help them repay debt.
Well, those who legislated and administered the scheme have gone out of their way to say, “It’s cool guys, don’t sweat it.” So I don’t think we need any more hand-wringing on this issue.
I think there is a broader issue still worth discussing though. Is it right (or wise even) for Christians to enter into debt? I know some Christians who wont go into debt as a matter of principle. Those are the only circumstances under which FEE-HELP might present an ethical dilemna.
The Ugley vicar aka John Richardson, has some thoughts on Christians going into debt. But does this mean only non-Christians are allowed to own houses?
Arguing against myself, my father was a scrupulous saver, but also generous, buying his sister who was a missionary a car, though he didn’t have one himself, for her work with The Leprosy Mission in India.
Dad didn’t get married till he was 42, but he did ask Mum if she would, 9 days after he met her en route to India to see his sister.
But he paid cash for everything, though he was only a modestly paid marine engineer, including our cars and our first house. But he took a whopping 4 thousand pound loan, I think for our second house, the only one he ever borrowed for.
Can’t imagine us ever having a house without the dreaded mortgage system, though. The most we borrowed was $63,000, and thus the $300,000 and more loans of this century make me quake with fear.
To look at it another way, those who suggest FEE-HELP debts be paid off even if not legally required are really suggested we pay extra tax. I see two problems with this: the ATO wants us all the pay the minimum legal tax, and that money could be put towards better things.
Fee help and all the rest of it (HECS &C;) is a modern day problem. The older system of the Commonwealth Scholarship where the government assumed the cost for those students who could not pay or who could pay with some difficulty provided they passed all their exams was a much fairer system. And people think Menzies had a problem with social equity?
I am not sure if Com Scholarships extended to private colleges, but then I dont think they were around much -except for theological colleges in those days.
To look at it another way, those who suggest FEE-HELP debts be paid off even if not legally required are really suggested we pay extra tax. I see two problems with this: the ATO wants us all the pay the minimum legal tax, and that money could be put towards better things.
my problem isn’t that there is a debt, my problem is with there being NO INTENTION to pay either a HECS or FEE-HELP debt. For me it is the intention, rather than the actual outcome, I guess.
John Richardson, the not-so Ugley vicar has written a response to this topic and has graciously allowed me to publish it.
Dear David
I had a look over at the forum thread you mentioned. Obviously there is a particular concern there - the funding of ordination training - which raises its own issues. Just as an aside, I would ask whether someone who intends to be a ‘fine artist’, or who goes to drama school, is going to be in a guaranteed position to make that pay enough to pay back their student loan, compared with a minister. Is education funding just an economic transaction, or is it a wider, social, investment that society makes? But that is another matter.
Going into debt is not unethical in itself. The biblical objection is to charging interest on a loan to a brother Israelite. This is because if the borrower needs the money (eg to buy food, etc), the lender who charges interest is exploiting their need and their poverty. The proper response is to be open-handed and generous. The difference the New Covenant makes is to extend the category of ‘brother’, as with ‘neighbour’, to be anyone and everyone who confronts me in need.
An interest-free loan to pay for higher education is thus perfectly OK - and in some circumstances, not paying it back should be socially acceptable. Society shouldn’t judge ‘value’ by ‘ability to pay’, otherwise education just becomes about ‘getting a qualification’ (which is what has happened here in the UK). Of course, it would be different if someone borrowed with no intention of repaying, but that is, again, a different matter.
The biblical injunction, in my view, makes both moral and economic sense. Morally, we should not exploit the poverty of the person who really does need a loan. We should equally not exploit the stupidity of those who are willing to borrow to buy what they don’t need. Economically, what the interest-based mortgage has done is to push up not the price of a house, but the level of loans people are willing to pay for. The result is that ‘house prices’ in the UK are so high that the market has seized up. Yet everyone (wrongly) thinks of their home as ‘an investment’. It ain’t while you’re living in it.
If we got rid of the mortgage system, the cost of borrowing to buy a house would decline (in the absence of a market for loans) and housing would be more affordable.
Similarly, the credit-based economy of cards and bank loans to fund consumption is economic madness. That particular chicken is coming home to roost with a vengeance here!
In short: charging interest to the poor is exploitation; offering are interest to the better off so they can have now, pay later, is putting temptation in front of them and in some cases drives up prices beyond what anyone can reasonably pay.
“FEE-HELP is a loan scheme that assists eligible students to pay their tuition fees.”
So, repayment of a loan should’nt be seen as an “extra tax”. It’s just repayment.
And yes, repayment of a loan - freely entered into - will leave less money available (to the borrower) for other things. It’s not clear how this makes intentional non-repayment ethically desirable?
But it is, they have loaned students the money, with the condition that the money is repaid once the taxable income reaches a certain threshold. While the ATO tolerates certain strategies to minimalise taxable income to avoid re-payment, those who have incurred the debt for the purpose of gaining a theological education for ministry purposes need to consider how avoiding responsibility for the debt affects the spread of the Gospel.
Student ministers can cry it is their right to never pay back that money because they will always earn under the threshold, and that would be acceptable to God, who says do not owe anyone.
To look at it another way, those who suggest FEE-HELP debts be paid off even if not legally required are really suggested we pay extra tax. I see two problems with this: the ATO wants us all the pay the minimum legal tax, and that money could be put towards better things.
The ATO does not want us to pay the minimum tax. The ATO does not give two stuffs about the amount of tax we pay apart from checking we comply with our obligations
But it is, they have loaned students the money, with the condition that the money is repaid once the taxable income reaches a certain threshold. While the ATO tolerates certain strategies to minimalise taxable income to avoid re-payment, those who have incurred the debt for the purpose of gaining a theological education for ministry purposes need to consider how avoiding responsibility for the debt affects the spread of the Gospel.
Student ministers can cry it is their right to never pay back that money because they will always earn under the threshold, and that would be acceptable to God, who says do not owe anyone.
Legally it may be a dept, but the word debt has connotations of being a burden, which FEE-HELP isn’t.
The ATO does not want us to pay the minimum tax. The ATO does not give two stuffs about the amount of tax we pay apart from checking we comply with our obligations
No I’m pretty sure they want us to pay the minimum. You can call up and they’ll help you get away with as much as you can.
my problem isn’t that there is a debt, my problem is with there being NO INTENTION to pay either a HECS or FEE-HELP debt. For me it is the intention, rather than the actual outcome, I guess.
As someone who is currently accruing a FEE-HELP debt whilst studying at college, can I clarify something here?
I have EVERY intention of repaying my FEE-HELP debt when I am required to do so. I entered into my FEE-HELP debt under a certain set of terms and conditions and I have every intention of honouring those terms and conditions- which includes repaying the debt as per the terms and conditions.
Just because I might never meet the threshold and might never be required to pay back that debt does NOT mean that I entered into the FEE-HELP arrangement with no intention to pay it back. Taking advantage of the FEE-HELP scheme to study at college with the knowledge that the government might not require me to repay the debt is NOT the same as taking advantage of the FEE-HELP scheme with no intention to ever pay back the debt.
Frankly, I don’t see how I could have had a hope of making it through college financially - at least at this stage in my life - without FEE-HELP. Whilst I think it is most appropriate to consider the ethical issues surrounding debts/loans/government assistance etc (and yes, with a specific view to the FEE-HELP situation) can we all just take a moment and perhaps reflect on God’s kindness in providing a way for hundreds of us to have the freedom to give up secular work in order to be trained and equipped for what will, God-willing, be a lifetime of ministry?
Again, I have no problem with debt, just the NO INTENTION of paying it back. Doesn’t worry me if it never gets paid back, just going into it with no intention of paying it back.
Gill.
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