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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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The thread is about student loans, in particular

Which for most, is not a choice. Most people have to get a loan to fund their education. Not everyone can fund it using a PT job, or has rich parents to toss them money.

And I know from personal experience that the costs for education are skyrocketing, it's not exactly cheap to get a degree.

How is there "not a choice"?

I went to community college because I couldn't afford anything else. Not that my community college experience has done anything for me except have me pass a bunch of classes that are meaningless to any actual skills.

It's either don't get a

It's either don't get a degree, or try to pay your way through a community college

What about those who go to universities?

I was accepted at FSU and there was no possible way I could have survived without student loans, I had a PT and everything so I was trying my best to go without them


Good point Freedom....

Not to mention SLAVERY.

Slavery, now, because of this (i.e money) and the newly installed outsourcing forcing us into competition with slave nations AND the very dangerous FUTURE SLAVERY, beyond what is going on now.


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

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

i appreciate the effort : )

im okay personally- decent job w/no credit debt. I just worry that some younger people may find themselves worse off by ignoring bill collectors. I remember a bunch of people I knew back in the 80's who were convinced that they didnt have to pay taxes - so they didnt. Eventually they ended up 'owing'a lot to the IRS. I agree tho- the 'loan'system is broken and until its fixed- people should do all they can to not participate. Wherever possible keep to the rule of thumb- 'If you cant pay for it, you don't need it.' Of course that pertains mainly to frivolous spending. Life throws enough disasters our way without having to pay off credit card debt for clubbing and electronics on top of it : )


Please see:

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

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

We're on the same page- just in different font in this issue

I read your post- I agree completely. The system is criminal- nothing less than organized crime at best. I was attempting to answer what is essentially a personal question about moral obligations.
Having the opinion I have probably puts me at risk for coming off as some naive cat lady : )
Im not thinking; "well, it's because all these loans are being defaulted on that we're in the mess we're in. Its because everyone shopped themselves into debt and went bankrupt that the interests rates are so high ruining it for everyone else blah blah"
But it boils down to my own personal hard-wiring. I don't like to have things that I did not pay for- but in the case of students- the circumstance may be as varied as the individual cases. I may even ADVISE some people to not pay back their loans.
I answered the question the way i personally feel. I would personally feel like my education was ill-gotten gain if I did not repay it at least in part.
My take is very simple. I dont like handouts. Its more about me, than the financial institution.
1. I have received
2. I must repay

At the very least I would pay it forward and do what I could to help someone else get through school.Id sleep better. May be just a matter of babysitting on wed & thursdays so some single mom could do night classes to learn a trade or something. I dont care the source of my debt, just that an equal measure of effort comes from me to repay. If I didnt make any contribution toward my debt after 6 years of free med school - I would join an non-profit organization that donates time and skill and works for people who have no insurance a few times a month.

But yeah- im with you completely about the technicalities of 'loans' $ 'exchanges'- my angle is centered around MY end of the exchange is all : )

We have to stop the fraud!

Its these type of loans that is destroying America and we must stop them! Speaking of the IRS what about this!

Under Article I section 9 of the Constitution it says "No Capitation, or other direct, Tax shall be laid" so how does the income tax get around this? Before you jump an say the 16th Amendment look at what the Supreme Court had to say about the 16TH Amendment.

"The Sixteenth Amendment.....does not extend the taxing power to new or excepted subjects....
Peck & Co. v. Lowe, 247 U.S. 165, at 172 (1918)

What this means is the taxing power congress had before the 16th Amendment remained the same after the 16th Amendment.

1895 the Supreme Court stated that a income tax on wages was Unconstitutional.

So in 1895 it was Unconstitutional to tax wages an the 16th Amendment did not change anything.....so what makes it Constitutional today?

We have been lied to all our life's!

Go home. Learn the legal

Go home. Learn the legal definitions that conform to makeing a 'contract', then come back and say that? You will not be able to.

Questions, anyone? Refer to Black's Law Dictionary, 6th ed.

Can't blame him too much

When the powers that be don't follow the ultimate contract - the US constitution.

When the federal reserve, which loaned the money for that student loan, is in itself - unconstitutional.

Not to mention that the student loan was a contract based on money that never existed to begin with, which would render it null and void anyways.

Plusm it's not like the banks themselves are legally obligated to repay their debt, they got bailed out remember? Yet we the common rabble must "adhere to our moral responsibility to pay off our debt".

The moral of the story... everythings F'd up

I don't know. Your friend

I don't know.

Your friend does have a point, though, when he says "Is there a reason to be honest when you're dealing with thieves and liars?"

Not sure what the answer is.

Student loan debt will follow him for the rest of his life unless the law is changed. Being in Asia might not even protect him forever because one day the US could make a treaty with whatever country he is in & then they will go after him for the debt + compounded interest.

This is a tough one.

Maybe the answer is that we live the way we know that we should and by living that way it becomes even more obvious to everyone else how the government is doing us wrong.


I don't say why? on the contrary ...

*** oops, this is a reply to sarx, far below, who claims I never gave any reason why the student is not morally obligated to pay back the loan ***

Many people on this post seem to lack legal understanding. Sorry, just the way it is.

I have said it in other posts. Read through. He is not morally obligated because the system is fraudulent, and the bank defrauded the student. Fraud vitiates a contract -- even constructive fraud vitiates a contract. If you do not know these legal concepts, you need to do some research.

A contract is an agreement between two entities, who agree to exchange something of value to each of them.

In the case of a student loan, the bank agrees to give something of value, THEY SAY -- fiat "dollars" -- to a student.

He agrees he will repay that with something of value, "dollars" plus "interest" in the future. In order to do that, he will have to WORK to earn the "money," since he had none to begin with. Thus the real VALUE he is exchanging is his future labor.

The bank, on the other hand, also had NO MONEY to begin with to loan the student. They had nothing to offer. It wasn't even other people's investments or savings they offered. Instead, they invented the "money" to give to the student, just like a counterfeiter would. They did not work for the "money," they did a magic entry in a checkbook account, and poof, the "dollars" appeared. If you did this, it would be fraud. If a bank does this, it is fraud. It does not matter how many laws say that the fraud is legally OK. It is still fraud. And that is the system.

As I explained elsewhere in the comments, no one is morally obligated to a person or entity that has defrauded them. If the student enters the loan "contract" not knowing or understanding that the bank has actually not offered anything of value, but that they simply created money on the spot, then he has been defrauded. (Not only he, but everyone in the country.)

On the other hand, if he entered the "contract" knowing that the money was created out of thin air, he is as immoral as the bank, and what can you expect from such an immoral creature? Personal responsibility? Hah.

But to be defrauded, and insist on paying anyway, because you "signed" a contract, is foolish in the extreme. I do wish more people had a deep understanding of how extremely evil and immoral the bankers are before judging the victims of their schemes.

It's not a loan

A bank cannot loan what is not theirs. All money, as we know, is debt. The "student loans" are financed by creating credit out of thin air. The banks did not earn that money, it was given to them, and in many cases it was taxpayer money they were given so in some cases your student loans consist of your money that the banks are loaning back to you with interest!

Furthermore, the creation of this phoney credit out of thin air devalues the dollar imposing an inflation tax on us. Lastely, the gov't has committed more taxpayer money to pay off student loans for those that can't so the banks are win-win.

The whole thing is a sham. If you can keep them out of your bank account and out of your paycheck then tell 'em all the pound sand.

Why even consider the morality of such an immoral system? lol!

So what happens when everything collapses?

If i have a mortgage with Bank of America when the house of cards collapses, for example, does that mean that they are probably going to seize my house and I am screwed if I can't pay it off in full or does it mean I get my house for free because they just went under?

Is it better, in the current situation, therefore, to get a mortgage from one of the too big too fail banks or from a smaller independent bank and why?

QE3 is coming baby

The FED is buying all Mortgage backed securities from the banks 40 billion per year. In other words the Federal Reserve will own your house! Maybe they will let you pay it off.

Surviving the killing fields of Minnesota

Todays brainwashing: GMO's are safe

Fiat money?

And where is the money coming from? You or me could do the same thing if we could create money out of thin air!

Yes and No

Yes if you have no clue what a mortgage is! NO if you understand what a exchange is!

Have you read what I sent you? The truth lies at you feet...pick it up!

Yes but I still don't understand the bottom line

Is your bottom line that we can somehow argue it's not a real loan and then have the rights to keep our house?

I get that the whole thing is a scam but that doesn't help me understand what is the best way for me to get a house right now if I can't pay cash for it in full in the system that we currently live in.


If the aim of this thread is to get our permission to feel okay about defaulting on student loans- sure. Fine. Don't pay your debt. Feed your family. Use the money to put gas in your car for work. Hell- use it to buy an iPhone and some new running shoes. Not my place to judge. All Im saying is that the same system that "screwed you over by forcing you into a fraudulent exchange" is the same system that will use every pre-existing law on the books to ensure that your credit rating (if you care) gets shot to hell etc. If you want to argue against that system to wipe out your debt based on all your arguments, you'd have more luck suing the GOP for cheating Ron Paul, having Obama's past 4 years overturned because he's not natural born and getting the gov't to admit that 9/11 was controlled demolition.

I agree!!!

Only he can decide if he wants to continue supporting this so called bank loans that are based on fraud or stand up to the truth! There is nothing wrong with a up front real loan where the money comes from bank deposit money. But to continue supporting these loans where the money is created from your promissory note and the bank does not even sign the contract goes against everything Ron Paul teaches!

He will have to decide if he wants to remain a sheep or wake up!!!

Please try to use even more

Please try to use even more exclamation points. I'm not sure they can hear you in the back.

Its an exchange not a loan

First off its not my bottom line its the law. I understand what you are saying Daniel. If you have read all 3 books the picture should be very clear. Go here http://www.livingfreeandclear.com/ and sign up its totally FREE! It covers what you are talking about above.

they'll fight to the end

The lending banks would in such case make attempts to not get screwed by hyperinflation and accepting worthless money for the debt. They will find some way to force the debtors to pay more. Maybe pass legislation that adjusts loans to inflation or makes debts payable in gold values at the lender's option. Or they will have the government bail them out again with the new currency to make up for the loss in the old currency.

So in that case

Would you say the best thing to do is lock in a mortgage price and then sell my precious metals during the height of the hyperinflation (and before legislation has a chance to get passed) and pay it off in full for a few ounces of silver?

Totally Lost....

I can see from reading here there is still a lot of people that have no clue what the banks are doing to them and our whole country! Read here if you want to wake up! Its a starter! Or you can stay in fairy land.



Re: I can see from reading here there is still a lot of people that have no clue what the banks are doing to them and our whole country!

Mind-boggeling, ain't it? I to thought most here were up on this???

Goes to show how much the "wake up call" still needs to get out.

People, if you don't understand this, then you're missing a HUGE part of what this movement is all about! Educate yourself!

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

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

Amen to that.

The economic and even moral ignorance shown by some commentators is very troubling.

Education is sorely needed.

if it were my debt, id feel like I was morally obligated

to pay the debt. I entered with the understanding that it was a loan and it was my responsibility to pay it back according to the terms to which I agreed. I'm not judging anyone here. Id like to think Id take the moral high ground myself, but unless Im in those shoes I can't say for sure what Id do - so again, I wont 'morally' pass judgement on anyone who chooses to 'bail'on their responsibility. But just to answer the question from a cold, factual standpoint- yes- such a person is morally obligated to repay such a debt. If I buy a house and lightening hits it and up in smoke it goes- its still MY house- MY loss- regardless of any misfortune that would later cause it to be a bad deal : ) I also believe survival and feeding your family comes first- before any thing else.

Re: if it were my debt....

True, BUT NOT....

If it were a rigged deal from the get go.

AND WE ALL need to realize that we are ALL in GRAVE DANGER because of it:

The entire economic system is being engineered to crash, the big banks are behind it so they can scoop eveything up for nearly nothing and claim ownership of the world.

Picture everyone in this country being bunched up against a cliff. The poorest are the closest to the edge and the rich furthest away.

There is a land slide and the poor going over the edge first and if this is not stopped it will eventually reach the rich too.

No one is safe if the slide does not stop. The people have to move in unison to stop the slide or keep running away from the edge.

The best thing that could happen is that the loans would be forgiven. It's either that or all of us end up going over the edge.

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

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


The problem is there was not a loan but an exchange!