Did you take out a student loan from the government or a chartered bank backed by a government guarantee to cover the loan if you default? Do you, as a libertarian/market anarchist, feel morally obligated to repay the loan?

If so, don’t. Why?

Let me back up a bit here. Your deliberations about whether to pay it back boil down to two basic categories: (1) prudential, and (2) moral/ethical.

Let’s deal with the prudential first.

If you don’t want the shit wages you earn garnished, if you rely on a good credit score, or you face other, even greater economic/social reprisals that outweigh the satisfaction of sticking it to the man, then by all means, repay your loan if you can and read no further.

With the prudential brushed aside, if your primary motivation is resolving a moral dilemma, maybe I can help. 

A key anarchist insight is that the state, an institution that claims a territorial monopoly on the legitimate use of violence, is a criminal organization. As such, the state has no legitimate standing in contracts. Any reasonable definition of a contract must exclude parties that are not the legitimate owners of the funds they disperse as part of the “agreement”. Even setting aside the imaginary “money” created by government backed credit expansion, what does it mean to “owe a debt” to a criminal organization? It means one of two things: (1) you are a willing participant, an accessory in this criminal enterprise, or (2) you are an ordinary human being whose range of available options have been severely restricted by the hand in glove relationship between the state and a racketeering coalition consisting of unaccountable predatory lenders, bankrolled state-chartered banks, lazy employers and a “higher education” class of corporate welfare queens and scammers. I leave it to the common sense of the reader to decide which of these is more plausible. The moral case for guilt tripping people who choose not to pay back their “loans” rests on grounds so shaky that a debt cancellation movement is even going mainstream, finding advocates among the establishment left.

If you lent me money, I’d feel an obligation to pay it back, and I hope you’d feel the same. But where government backed loans are concerned, this is literally on par with the “duty to pay one’s taxes.” No such duty exists since taxation is a non consensual transfer of income and/or property to the state. The case against repaying student loans is similar in nature since the structural conditions that compel many people to rely on such debt result from a state of coercion despite having all the trappings of a voluntary agreement. I’m setting aside the issue of private sector loans, which, depending on the level of state collusion with coercive credentialism and so on, MAY generate a moral obligation. 

There is also the issue of “adhesion contracts” or contracts between unequal parties. While I’m sympathetic to the spirit of these objections, I have my reservations about its slippery-slope implications, but I think it’s entirely apt in this context. The inequities and artificial barriers to self-provisioning that drive countless people to apply for these loans in the first place reflect a state of coercion, and what moral/political obligations emerge from a state of coercion? None.

Never pay your student loans if your objective is doing the right thing. Don’t abet the state in its perpetuation of this giant violent swindle. Spend it on your family, friends, buy drugs, dig a hole in your backyard, throw the money into the hole and burn it. Buy or build booby traps for any cops trying to remove a homeless person. There will always be a better moral investment for what scarce resources you have. Utilize them wisely.