Faith and sin

Got a good question in a small group discussion on Tuesday and I wanted to know what you guys thought. I have my own personal answer, but when I gave it, the person was not entirely convinced, so I'll post it after a little input from you guys.

The question:

If sin is a lack of faith, and we need faith to be saved, what is it when we sin? Are we "not saved" when we sin? Or is there a range of "faith," where we can achieve a minimum level to be saved, but not enough to avoid sinning? Can faith and sin coexist?

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Who's ready for school to start? And when are you guys going to post your bios?