At the end of seven years, you are to make a Release [shmita].
Now this is the matter of the Release: he shall release, every possessor of a loan of his hand, what he has lent to his neighbor. He is not to oppress his neighbor or his brother, for the Release of the Lord has been proclaimed!” … – Deuteronomy (15:1-2)
Debt release is as intrinsic to the concept of Shmita as is the fallowing of the land. And like the fallowing of the land, it is extremely difficult to imagine doing in practice. Indeed, the difficulties were foreseen by the Author of the Torah, as it were, as the verses that follow the commandment to release debt acknowledge that the tendency might be to reduce lending to one who is in need if the lender fears he may not be repaid. The text goes on to exhort those in a position to lend to “open, yes, open your hand to your brother, to your afflicted-one, and to the needy-one in your land!”
In our community we held a discussion a few weeks ago about Shmita and debt, student debt in particular. The young woman who led the discussion was a law school graduate burdened by a significant amount of student debt. She spoke movingly about the effect the debt was having on her life, on her ability to own property, and on other major life choices and options. And yet, in the end it was impossible for her to conclude that student debt should be “erased” if doing so would reduce lending for education or lead to irresponsible behavior on the part of borrowers.
As I reflected on this conundrum, I came across a (perhaps) little known (at least little known to me) institution of Jewish life, the Hebrew Free Loan Association. This institution allows Jews to borrow money at zero interest for a variety of purposes, including getting an education, starting a business, and consolidating debt.
Hebrew Free Loan Associations operate in many cities in the United States including Seattle. According to an article by Michael Feldberg in My Jewish Learning, Seattle was actually the birthplace of the Hebrew Free Loan Association in America! According to Feldberg:
In 1909, a group of Seattle Jewish women formed a whist and sewing club with dues of 25 cents per month. When they had accumulated $64, they offered to purchase a gift for their local synagogue. Because the rabbi knew that the women raised the money by playing cards, he refused the gift. Undaunted, the women started the Hebrew Ladies’ Free Loan Society of Seattle. Their thoughtfulness helped some of Seattle’s first Jewish entrepreneurs get started in business.
Other HFLAs followed, and they were generally used to assist new Jewish immigrants at a time when they had a hard time gaining access to commercial credit. To be eligible for a loan from the Seattle Hebrew Free Loan Association a borrower must:
- Be a member of the Jewish community residing in the State of Washington or a local Jewish student attending any accredited college or university.
- Have two co-signers.
- Have a source of income so that he or she will be able to repay the loan.
While the HFLA is dedicated to Jewish self-help, (according to Maimonides, “A loan is better than charity, for it enables one to help oneself”) there is nothing barring the wider community from forming “free loan” associations along similar lines.
Potential donors may wish to consider gifts to free loan associations as part of their overall charitable giving portfolio. Donations are tax deductible, and membership dues cover the administrative costs of the program. (The Seattle Hebrew Free Loan Association will hold its annual brunch on February 8. This might be a good way to learn about the program, meet people, and make a contribution.)
And debtors may wish to consider converting some of their commercial “debt with interest” to the type of debt without interest offered by the HFLA.
All of this is perfectly legal, and while it does not directly speak to the subject of total debt forgiveness envisioned in Shmita, it does perhaps point a way to some significant amount of debt relief through the elimination of interest payments, relief that is available today, operating within all of our our existing institutions and laws.