"When I graduate from seminary in 2011, I may have a cumulative $97,300 in student loan debt," writes Daniel Ross-Jones in his blog Green Jello Hotdish.
Based on an extended 30-year repayment plan, an average 6.80% interest rate and zero loan fees, my monthly payment will be $634.32 and amount to $131,058.98 in interest payments over those 360 payments. In order to afford that monthly payment, according to federal financial aid guidelines, I should earn an annual salary of at least $76,118.40.
As a Student In Care of the Southeast Wisconsin Association, should I graduate and secure a call in an "average" Wisconsin Conference congregation . . . I can expect a salary of $33,039, or $43,079.40 less than the recommended salary for my debt load.
As Ross-Jones illustrates, student debt is another of those economic bubbles that challenges theological education. In a recent issue of Faith and Leadership, Lutheran bishop Rick Foss describes his moment of conversion on this subject.
When Foss headed the Eastern North Dakota synod of the Evangelical Lutheran Church in America, he learned that the average student loan debt of his new pastors was $30,000. Not surprisingly, North Dakota clergy salaries are low, and most pastors are hesitant to ask for raises. As a result, many young pastors feel resentment about their calling. They feel trapped. They seek new positions in bigger cities or leave ministry altogether.
Foss says that this is not a matter of young people who are unwilling to work hard and sacrifice. Rather, there's a systemic problem. It's not news that seminary and undergraduate costs have been rising fast for decades, and that these costs have translated into rising tuition and fees. Meanwhile, encouraged by easy credit, students have piled on the student loans and charged groceries to their MasterCards.
Solutions are being tried.
For example, individual theological schools like Erskine Theological Seminary and Seminary of the Southwest have programs to reduce student borrowing.
Denominations like the Presbyterian Church (U.S.A.) have church-wide programs to help clergy pay down their educational debt.
And Auburn Seminary has some excellent resources, including a video, to help all theological students (no matter what school they attend) think more realistically about what they owe and what new obligations they're taking on.
But this is an issue that requires board attention as well. It's part of the context of theological education that boards must understand as they guard their school's mission and seek to expand their own school's financial vitality. It means that for each dollar that tuition rises, the amount that each student owes rises by more than a dollar.