35 votes

Morally bound to pay off school debt or not?

Hey everyone. I just wanted to get your insight on something my friend said to me recently that's a bit of a conundrum for me. Let me preface this by saying that I'm current on all my student loans and bills.

He's 37, got his masters a couple years back at a school that supposedly had a 100% placement rate at good companies. Turns out that 100% bit wasn't true in his experience and his advisor just kinda shrugged his shoulders when he found himself without any takers after graduating.

So here he is with $100,000 in student loans staring him in the face and without the high paying gig he was "promised" to pay it off with. He decides he needs to clear his head and goes to Asia where he now teaches English. In my 1 year of knowing him, I've never known him to lie or slack off when there's work to be done and my impression is that he is an honest, hardworking, outgoing American.

So then day he says to me, "you know there's no way I can possibly pay off that debt, right? And why would I? It's not real money anyway. Some banker created it out of thing air. No private citizen is directly hurt if I default on the loan, and it'll just kill my credit in a country I no longer wish to return to as its become nothing more than a police state with a grim future. Is there a reason to be honest when you're dealing with thieves and liars?"

Kinda dark, I know. But my question is does he have a point in there somewhere or is he just being a "sore loser" (for lack of better words)? I mean, when the government and the banking system that gave you the loan are crooked as hell (fractional reserve, "money as debt", bailout after bailout, etc.), why should we the customers be beholden to being honest and pay our debts off? Now, I'm not looking for an excuse to stop paying my loan installments or bills. I just want to know if there's a reason to be moral towards those that aren't moral towards you.

I kinda felt a little soiled by what he said and at the same time found myself agreeing for some reason. In a just society, issues like this wouldn't be an issue. You make a promise and keep your word and that's that. In an unjust society, questions of morality become more abundant and "stickier".

Anyway, thought? I've had a few drinks so I hope this has made sense and all that ;-)

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Denise B's picture

I think the correct answer

is that he should not have taken the loan at all, if he did not have every intention of paying it back, excuses aside. Yes, it's true that it is a rigged system, but nobody is forcing anyone to take these loans. Regardless of where the money came from, your friend received a benefit from that loan, i.e. a full education. Even if it is monopoloy money, it doesn't erase the fact that he received goods and services under the promise that he would pay back the money which provided him with these goods and services. He entered into a contract knowing full well what the terms were.

Trying to argue the fairness of the transaction, AFTER you received goods and services from the transaction, is kind if disengenous to me. It's kind of like borrowing money from the mob at an extremely high rate of interest and then when it comes time to pay them back trying to argue that it was "blood" money that they gave you in the first place, so you don't think you should have to...good luck with that. If you want to avoid being in this situation, stop borrowing money from the mob.

There never was a loan to start with!

"He entered into a contract knowing full well what the terms were."

NO he did not know full well what the terms were! He thought he was getting a loan! BUT the bank never loaned one penny! They took his promissory note and deposited just like cash and then gave it back as a loan! NO WHERE IN THE CONTRACT DOES IT SAY THIS "NO WHERE". So if you want fairness all the banks have to do, is in the contract show where the money comes from and how it works! Show how the money comes into being when the bank gets your promissory note! Without the promissory note there is NO money! Also tell the borrower that he now owes the bank the XXX amount plus interest on the money the borrower help create! Plus tell the borrower that he has to work XXX number of years to pay the bank back plus interest and if he doesn't the bank will get his house, car or anything he has of value for free!

So let me ask you a question? If you want fairness....Do you think the bank in the contract should tell the borrower how the loan will work and how the bank will use the promissory note to fund the loan? Or should the bank just keep lying on the contract just like they have been doing for the last 100 years?

Another reason all 'notes'

Another reason all 'notes' are fraud. It can be found right there in the first line titled "promise to pay". "I Clay Carey promise to pay ABC Bank, IN LAWFUL MONEY, the sum of....."

A stipulation that is NOT possible since ONLY gold and silver are lawful money....

Denise B's picture

I understand what

you are saying, and yes, banks should be required to fully disclose the terms of the loan and I am not trying to argue otherwise, but their deception does not negate the fact that his friend received a $100,000 education and after receiving it, now wants to get out of paying it back. What if he had gotten a loan directly from the school? What if the school said we will give a $100,000 education, and not require you to start paying it back until you graduate? How would he be in any different situation owing the money to the school or to the bank? Both of them would be loans that were given on his "promise to pay them back", and both of them require him to work XXX years to pay it back and create a huge burden on his life.

I fully understand what you are saying, and our entire fractional reserve fiat money system is a sham and should be abolished, but at the same time, there are others things at issue here. Why is nobody asking why it even cost $100,000 to get an education? And why is anybody willing to get a loan for that amount when they clearly can not afford it and other options are available? (i.e. community colleges, trade schools, etc.) The banks should not be allowed to operate the way they do, but nobody is forcing them to take out these loans. Getting into $100,000 debt at the age of 23 or 24 is a very bad situation for anybody to be in (especially in our current economic environment), no matter who they owe the money to, and it should be avoided at all costs, in my opinion.

I agree with you...

I agree with you and see where you are coming from....BUT you have to understand.....these are not real loans. I understand that no one should get something for free! But if you pay it back to the bank...the people over the bank get it for free! You see this is what the founding fathers was afraid of! One class of people transferring wealth from the rest for their own personal gain for free! YES pay back the alleged loan but not pay the banks! But to the state governments....that way the people could decide how the money would be spent!

Denise B's picture

I think we are

pretty much on the same page. The federal reserve fiat banking system needs to go! Nobody should be getting anything for nothing, especially them! I guess the overall point I am trying to make is that until we can change the current system, avoid getting yourself in debt to them whenever possible, and realize that if you do, you are always going to come up on the short end of the stick. :)

Taking out a loan, and having no intention of paying it back

is theft.


Ms. Booth,
Borrowing and not paying a loan back is not theft. It is a civil action. It is the bank's responsibility to determine the character and intent of the borrower.

It is simply a part of risk management by the banks and the cost of the risk management is included in the interest rate and fees charged to the student. Bad student loans were historically dischargable through bankruptcy.

However, since Jan. 1 2000, students have not been able to escape these debts resulting in the banks and government loaning money willy nilly to millions of students who can never escape.
Tuition has skyrocketed ever since.

"Timid men prefer the calm of despotism to the tempestuous sea of liberty" TJ


This is one way to deal with the situation:

Negotiate an affordable monthly payment for the time being to be credited against the loan balance. Do not agree to have the interest cancelled in exchange for inflation adjusted principal which is a new wheeze they have come up with. Buy a fixed dollar amount of silver every paycheque. Here is one place to do this: www.goldmoney.com

In time the dollar will collapse and eventually be worth a lot less than it is today. At the same time precious metals will be worth much more. When it is seems appropriate sell some silver and pay off the loan.

Morally you are bound to repay the debt since you have received goods and services over a number of years that relate to that debt. There is a time of jubilee, debt cancellation, and that will arrive with the dramatic depreciation of the dollar.

Whatever you do do not ignore the debt, it will not disappear and if unpaid will give the creditor recourse against all your property. They can also obtain court injunctions against you and will add court costs and fees to the principal. If ignored it could easily double or treble.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

Cyril's picture

You'll find the answer for yourself

You'll find the answer for yourself, eventually. I'm sure.

These might help :

"He that dies pays all debts." -- Stephano, in Shakespeare's The Tempest

"He who pays his debts gets richer." -- old French proverb

"“Tell us, therefore, What do you think ? Is it lawful to pay head tax to Caesar or not ?” But Jesus, knowing their wickedness, said: “Why do YOU put me to the test, hypocrites ? Show me the head tax coin.” They brought him a denari. And he said to them: “Whose image and inscription is this ?” They said: “Caesar's.” Then he said to them: “Pay back, therefore, Caesar's things to Caesar, but God's things to God.”"

-- Matthew 22:17-21

"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius

There Certainly is a Moral Obligation to Repay

Two wrongs do not make a right.

If a person promises to repay a loan, then he or she should make every effort to do so.

How the loan proceeds came into being is not relevant to the moral question.

Here the lender agreed to pay certain education expenses in return for the student's promise to repay.

There is no indication that the lender represented that the student would have a 100% chance of placement with good companies upon obtaining his master's degree. The student assumed this risk as part of the transaction.

It is true that the banking system in this country is hopelessly corrupt and immoral. But that fact does not give borrowers a license to be equally corrupt and immoral.

Repay What???

The lender is the borrower! I agree with your last sentence! This would not happen if the banks were upfront on the contracts and would let people know where the money really will come from! So who is the true thief here?

... does he have a point in there somewhere, or...

is he just being a "sore loser".

Is he being a "sore Loser"? Let's look at the International Students, who came into this country to study with nothing but a couple of hundred (or thousands) dollars. They got scholarships, they worked their way through school. Through all the years they paid out-of-state tuition (usually double the in-state tuition) and they graduated without ANY debt since IT IS AGAINST THE LAW for them to take a student loan.

Then they got a job during their Optional Practical training and then they got an H1-B. And then they became Permanent Residents because the company for which they worked (their behinds off) could not find an American Citizen to replace them. Then they became American Citizens all the while "steeling American jobs"...

The points, ALL POINTS, in this post are nothing, but pathetic.

Absolutely not. The

Absolutely not. The originator of the loan took a gamble. 100% risk is on the originator. When you take out a loan, the agreement is you'll pay it back if you can. If you can't than tough luck for the them, they made a bad business decision. I don't care what the agreement says, slavery is always against the Law.

Proverbs 22:7

And if you think that you can "free load the system", reap "benefits" on my and my children's expense, you are mistaken. By doing this, unfortunately you become a slave, emancipated, emasculated, deprived of dignity. Think!

Yes, you are morally bound to repay the loan.

The loan terms were spelled out before You signed in agreement with the terms of the loan. Even the "fine print" screamed for details to be considered before the loan agreement (you DID agree to it, didn't you?) was signed BY YOU.

No one can excuse You for Your ignorance and apathy to details and truth. You may have been ensnared into a trap, but it was You who have taken the bait without doing Your homework.

Seeking a way out of the contractual agreement that You have signed and You have agreed to follow is similar if not the same as seeking a bailout, just as those who were condemned and judged for giving/taking the bailouts.

To ALL Communist infiltrator downvoters:

What makes you think that you support Liberty and yet you could partake of MY wealth and of the wealth of MY CHILDREN?

The loan that you free-loaded on was paid by MY taxes and the taxes that MY CHILDREN are going to pay. What makes your little mind think that you can take MY WEALTH for your benefit and not repay it? What makes you think that "the adviser" is the one you should listen to and the one who is supposed "to guarantee" your job?! Are you out of your mind?!

Get out there in the marketplace and sell your assets and develop a network and start slow and start WORKING, and begin to REPAY your OWN OBLIGATIONS.

Start small and FRUGAL, then become a business owner and an investor and get out of the rat race. This is better than to look for pathetic excuses on how not to repay YOUR OWN loans!

So which is better?

Is it better for the Bank to get something for FREE or is it better for the alleged borrower to get something for FREE?

Just who is the lender???

Thought I would past it on. Don't know where it come from but it does a great job exposing the banksters!

Mr. Crawford questions a national bank in a Maryland
county court.
Mr. Crawford asked the bank accountant, "Are you an
expert in this field?"

The Accountant said he had a four year college degree
in accounting and ten years experience in the bank accounting
Mr. Crawford said, "Now look at the jury and explain,
because they all have homes and they want to know, when they
sign the promissory note, bank loan agreement, was this promissory
note used as consideration to fund the bank loan check?"
The accountant said he did not understand.
Mr. Crawford said, "Did you use the promissory note
as currency to deposit it in a checking account or transaction
account, set up under the borrower's name, to issue a check?
And was that check the money loaned to the borrower?"
The accountant coughed and said, "That is correct." The jury
gasped. The accountant explained how the borrower created the
funds that the bank used to loan back to the borrower and then
they charged him interest on top of it.
Mr. Crawford asked, "Are promissory notes accepted
as money?"
Yes, the accountant admitted.
Mr. Crawford said, "I want to know from your experience
how this works." The accountant said, "When you sign
the promissory note it is currency to the bank but it is a promissory
note to the people."
Mr. Crawford asked, "Where is that agreed to under the
"It is not mentioned under the contract", said the accountant.
Mr. Crawford asked, "If it is currency to the bank, what
do we get?"
The accountant said, "We loan back to you what you
gave us, which is your collateral, and we put it on our books as
an asset to the bank and liability to the bank."
Mr. Crawford said, "What does that mean?"
He said, "If the bank got $40 million in promissory
notes, there is a $40 million offsetting liability. The liability is
what the bank owes."
Mr. Crawford said, "So the bank is broke, owing $40
million for the $40 million it claims it loaned."

He said definitely.
Mr. Crawford said, "So there is no way the bank can
pay that bank liability for the loan?"
He said, "Definitely not, the bank can never pay that
liability. It is a little misleading."
Mr. Crawford said, "That is fraud. You say you took in
$40 million of promissory notes recorded as a bank asset offset
by $40 million in bank liabilities, and the bank cannot pay the
liabilities for the money owed for the loans."
He said that is how it works.
Mr. Crawford said, "Does the bank advertise that it loans
its money to obtain promissory notes?"
He said yes.
Mr. Crawford said, "Is that what happens, or is that
advertising deceptive?" The judge broke his pencil.

the Magician

is the lender. So - you (as borrower) pay back in a similar manner. There are morals & laws involved here, i.e. you have to return the loan, that which you received, = fake money, but but but it was acceptable to people around you.

People borrow because of need, greed, or ignorance of consequence, but only fools pay interest willingly. Therefore resist, refuse, delay the repayment of loan added with interest, insist it$ immoral, & not Biblical, - argue & tire them out - they lack stamina & have many cases to deal with. the borrowers should gang-up against the usurers.

Or, you do the same thing, = print & pay. They may say it$ fake, you say its similar to what they lent. then police arrive, = longer story.

You did not understand a word

You did not understand a word he wrote. There was no money it was a complete fraud there were no morals or laws it was a complete fraud. the bank did not fulfill the contract they lied and deceived you into thinking they did. You people have been brainwashed to believe you were loaned money when you were not. And you fight the truth when it is presented plain as day... See how well they have brain washed you?

End The Fat
70 pounds lost and counting! Get in shape for the revolution!

Get Prepared!

What will it take?????

hawkiye why is it so difficult for people to see this? You can spell it out right in front of them and show proof....then they make a quote like they did even read or comprehend what they just read! I'm starting to feel like that duck on the insurance TV commercial!

Is it moral to aid and abet a con man?

The banks are utterly immoral - usury is a sin. There is no justification for the fees the colleges charge, other than they have worked out a deal with banksters to give out loans to very young, idealistic people who likely NEVER heard the truth about fiat currency, loans, etc.
It is immoral to repay "loans" from these traitors. (It is not a loan, the money was never theirs.)

Love or fear? Chose again with every breath.

Not only was the money never

Not only was the money never theirs to loan the money never existed in the first place!

End The Fat
70 pounds lost and counting! Get in shape for the revolution!

Get Prepared!


DP'ers, as I read posts below, I see many of us here still don't get it. WHY am I stressing this point? Because, this IS a huge part of what this movement is all about. It is one of the KEY building blocks of this movement, ONE of the key things that were all supposed to be UNITED ON. AND as I read posts below I see we are not united -here- because people still don't understand The Conspiracy that started this all.


This was what "The Creature from Jeckel Island" and many other books on the topic were all about!!! AND now I see that how many DP'ers that don't get this, tells me a lot about what the rest of the country must know.


It looks to me like a lot of the "pay-em-back" believers probably and "smartly" don't have a loan out so it's easy to just blow this topic off and say "pay-em-back" without really understanding how, in the long run, this things gonna come back around and bite them too, with a loan out or not.

This whole thing ties into progressivly increasing hyperinflation THAT COMES WITH DEPRESSION. *In 1918, in Germany an egg went from 0.63 marks to, in 1923 320,000,000,000 marks. Do you get it now?

This is what people need to wrap they're brains around! Even IF you believe in paying em back, YOU WILL NOT BE ABLE TOO, YOU WILL BE BROKE AND ON THE STREETS JUST LIKE EVERYONE ELSE WILL GO BROKE AS PRICES KEEP RAMPING UP.

You just CAN'T pay them back under this sort of hyperinflation. YOU won't be able to pay for jack s*hit. Keep going down this path and you will get to that place that Nancy Pelosi say's "we gotta go see".


See how Iceland did it. FTB

Because: Some animals are more equal than other animals. -Animal Farm-

What the? > http://www.youtube.com/watch?v=6MTIwY3_-ks

Keep it up!

American's have been lied to so long, that when they are showed the truth they refuse to believe or even look into it! Do your own research but PLEASE open your eyes! They have made slaves out of us and our children have no future, if we do not wake up!


That was drummed into me as a kid.

"Neither a Borrower nor Lender BE" was another saying I grew up with and these saying of wisdom helped me a lot.

Banksters are not the only people who con us, so it is our responsibility to read the fine print.

When the economy tanks a handshake will once again be a contract,
and a person's GOOD NAME will also have meaning again.

When I was young we took great pains not to diminish our families good name because it affected the communities trust in you.

That is why in the old old days if a family name was slander they might have a duel and end in someone getting shot. That is when the court system came in to end duels.

If we are defrauded, the court system is where we could get justice.

The banksters will get their pound of flesh and they will likely have bounty hunters get their money and/or have your friend put in debtors prison.

Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.

Repay the loan

Too many people forget or just don't know that a major reason the country went in to a recession is because the housing market crashed when businesses, banks buying up the mortgages went bankrupt. The reason they went bankrupt is because they were not able to recover the money that was owed to them. Homeowners were/are being foreclosed on all the time because they can't pay their mortgage. The banks are partly to blame for this because they gave the people the money in the first place, they were the ones to trust the homeowner to repay the loan.

However, it is mostly the homeowners that were trusted to pay back their loans and didn't that are at fault. It is easy to blame big corporations, for problems that aren't easily understood, and the politicians would never say it was average joe's fault. But when it comes down to it, it is average joe's fault.

I see this post as a sign of things to come. School loans will be the next big bubble to burst, because the entitled don't think they need to repay what was loaned to them. But don't worry, the fed will print more money to prop up this new system of entitlement, and remember "No private citizen is directly hurt if I default on the loan" says the poster's friend.

You are totally lost!

You need to do lots of research. There never was a loan to start with! Just a fraud contract full of lies wrote up by the banks! Watch the video here of the 12 year old girl talking about bank loans! Then start researching for the truth! You must wake-up!!!!

The waking up part...

is NOT to take out such a large loan from the beginning.

Running up debts on college, homes, and credit cards with the forethought that you shouldn't have to pay it back is just as shady as the bankers.
Taking the money without payment is the same as accepting food stamps and/or social services checks - which means you feel the government "owes" you something for free.
As someone else stated - if one feels that have been wrongly treated in a financial arrangement - take it up with the courts and prove your case.