The Debt Liberation Laboratory (DLL) is putting the time-honored lodge system to a new, relevant purpose: the accelerated repayment of undergraduate debt, which is one of the most significant social issues of our times.
As a beneficiary society, we are operating under IRC Section 501(c)(10), “Domestic fraternal societies, orders, or associations, operating under the lodge system.” This is the same section of the nonprofit tax code that is used by societies such as the Elks Lodge and Shriners International.
In our lodge system, members come together with the shared purpose of college debt reduction and liberation. Charitable donations made to help pay down a Lodge’s debt balance are tax-deductible by law.
Small groups—perhaps eight to twelve people—constitute a collective focused on accelerated payback of undergraduate debt. Lodge 1 started with ten people who all attended the same liberal arts college.
None of Us is Free Until All of Us are Free
Within Lodge 1, some members are free of student debt. Other members have debt. Some started the experiment with debt and are now debt-free. Our Phase 1 goal is to fully relieve Lodge 1’s debt, but our work will not stop there. The broader purpose of the Debt Liberation Laboratory is to pilot a nonprofit model and build financial repayment distribution infrastructure that can be used by others to start their own Lodges, such as with friends from college like us, or as alumni groups and associations.
In the Meantime, We Work
Monthly meetings provide a focus for our collective action and camaraderie.
As a chartered lodge, our primary activities are:
- Working to relieve members from student debt, financially and emotionally
- Continuing lodge meetings
- Performing rites and rituals, as required by law under the lodge system
- Tracking and reporting on our collective debt balance
- Growing our financial literacy
- Creating a safe space to talk about debt
This Work is Love
Central to this experiment are the senses of belonging and shared experiences we feel as past students and graduates of the same college. These bonds form a foundation for the altruism and empathy it takes to tackle our student debt together.
The Grand Lodge
Operating under the lodge system requires two active entities: a parent and a subordinate (referred to as a “lodge”). The Debt Liberation Laboratory’s Grand Lodge is our parent entity It is 100% volunteer-led, has no paid employees, takes no transaction fees of any kind and receives no payments except when donations are specifically made to cover the Debt Liberation Lab’s annual operating costs (such as webhosting fees and banking transaction fees), which currently run at approximately $1,000-year. Other services, such as website development, are currently donated in-kind. The Grand Lodge:
- Collects and redistributes due payments and donations, ensuring 100% of funds go directly to pay off outstanding loans
- Provides the nonprofit infrastructure needed to support lodges, such as website hosting
- Provides financial reports and updates, such as when a loan is successfully paid off
- Maintains the organization’s nonprofit status
If you are interested in helping Lodge 1 pay off its collective debt balance or cover its annual operating expenses, you can make a tax-deductible donation.
If you are interested in learning more about how to start a Lodge, we welcome your outreach.