The Pastor Debt Monster

Originally posted on OuterRimTerritories by Pastor Christopher Gillespie.


Back in June, Larry Crume of LCEF posted a blog on the increasing level of student loan debt for the pastors of our church. In various conversations I have discovered that most are unaware of the real financial burdens of those who are graduates of residential seminary education.

The Lutheran Church Missouri Synod collectively has affirmed that  a Masters of Divinity earned at one of our two seminaries is necessary preparation to be a faithful steward of the mysteries of God. Over recent decades the LCMS has also added non-residential programs such as DELTO and more recently SMP (Specific/special ministry pastor). These alternate tracks are not always less expensive and in some cases more.

We have a church body that expects her pastors to have an advanced secondary degree. We live in a culture of resigned to amassing large educational debt for undergraduate and graduate education. We have pastors who by and large are underpaid relative to others who have earned a three year masters degree. We have congregations and a church body that is largely unaware of the incredible debt load of the pastorate (to say nothing of consumer debt.)

In 2006 and 2011 the Lutheran Church Extension Fund conducted a survey of our pastors on this very topic. Somehow the results have passed unnoticed. I don’t recall a Lutheran Witness article or a letter from the president to the congregations. A place to start is with Crume’s post and then his followup response:

Healthy Pastor, Healthy Church
by Larry Crume on June 18, 2012

I have spent quite a lot of time looking into the student loan debt topic the past several months. Even before this made the national headlines recently. What I found is quite alarming. Many (but fortunately, not all) seminarians placed in their first call are bringing an unhealthy level of student loan and related educational debt with them. For those fortunate enough to have a call that pays them LCMS District salary guidelines, this debt is often manageable. For others, it represents a huge millstone that many of us in the secular employment sector would find a struggle to overcome.

LCEF conducted a survey in 2011 of LCMS rostered church workers. As many as one in four respondents said they were “uncomfortable or very uncomfortable” with their level of debt. Think about this for a moment: congregations expect a pastor (with the equivalent of a master’s degree) to accept a call at entry-level wages. That’s difficult enough for the traditional student who went straight “through the system” of college into the seminary with adequate family and congregational support. However, what about the many second-career seminarians who financed the majority of their FAMILY’s living expenses for four years?

Through LCEF’s Rostered Church Worker Loan Program, we are seeing increasingly higher debt levels of educational and credit card debt. This negatively affects the ability of some borrowers to obtain housing for them and their families. The residual effect is a reliance on credit cards, secondary employment and family members for daily sustenance. While many have benefitted by utilizing the Consolidation Loan Program through LCEF, even that has limitations.

Society tells us to file bankruptcy. For our pastors and teachers, this can be a career-ending option. Rostered church workers can be removed from the roster for such decisions. I know there are decisions made related to personal financial management and each must take account of that. This is not only societal but also biblical. So, the lingering question remains: how are WE as a church body going to address it?

Our church needs and expects, financially and physically healthy pastors to shepherd their flocks.

As a church body of some 2.3 million members, the resources are there. For the good of the church, this is a topic that merits continued discussion at several levels. LCEF is committed to staying actively engaged in the conversation, working with our ministry partners of the LCMS, districts and related entities to provide products and services consistent with our core ministry.

It all begins with prayer. It continues with stewardship at all levels. Not just the pastor, but also individuals and congregations. We all are a part of the solution.

Larry Crume

Sr. Vice President

Loans & Real Estate

While I found the post helpful I also was interested in a  bit more raw data on actual loan levels of graduates today versus their previous 2006 survey. Mr Hume responded:

LCEF conducted a survey in 2011. This was a similar survey to one conducted in 2006. The respondents ranged from newly called workers to those having been in the ministry several (30+) years. This tends to “skew” the medians. The respondents were nearly equally divided into ranges of 0-10, 10- 19, 20-29 and 30+ years in the ministry, The median numbers for those in each category, for example, is not available. However a couple of things that jump out: The median level of outstanding STUDENT LOAN debt was $18.1K. On the surface, that doesn’t appear alarming. However this figure is 20% higher than reported in 2006. In addition, the number of workers that incurred student loan debt increased from 48% to 61%. Those reporting outstanding debt in excess of $50K increased from 4% in 2006 to 10% in 2011. An increase of 250%!

Adding to this, the reality of non- traditional debt for financing education (personal loans, credit card, family loans) only adds to the stress levels. Although we do not capture the data, through LCEF’s Rostered Church Worker Loan program, applications listing student loan debt levels of $50-75K, and even $100K+ are not as uncommon as they once were. This could be attributed to a number of things but most likely, increasing education levels as well as a misunderstanding of the Public Service Debt Forgiveness Program (within the US Dept. of Education) application to ministers of religion. Credit card debt levels continue to increase as well.

I won’t drill further into the minutiae at this time. Suffice it to say, this survey is just one indicator that the conversation needs to continue. It has gathered the collective attention of those at the District and National levels as well. There will be no single solution and we all have a part in addressing this.

via Healthy Pastor, Healthy Church « Leader to Leader: The Business of Ministry.

How many congregations and lay leaders are aware that the median student loan debt among pastors surveyed is $18k+ with figures rising for pastors with less experience? Based on this data my guess that the average (not median) for my 2009 graduating class was at least $30k per student is probably accurate. That’s over $4 mil for the graduating class of CSL/CTSFW of 2009 alone.

The first thing that must be done is have this information dessiminated to every congregation and lay leader. They should be prompted to ask their pastor about his debt load from Seminary and whether an adherence to typical salary practice in the LCMS/district is sufficient for him to pay down these loans. These loans were amassed to meet the expectations of the congregation and the church at large. The responsibility and expectation of our Synod is that the congregations would be financially responsible for the education of their pastor.

One suggestion made is that the congregation take a collection and pay down the loan as a special gift. A classmate had a wealthier member who was aware of the debt load of our graduates and paid both his undergraduate and graduate loans. Not every congregation will have the means to compensate their pastor enough to cover these costs. Thus districts, LCEF, LCMS Foundation, and other entities within the Synod need to be attentive to this financial blight and seek to both educate and be strategic in reducing this financial burden for the current pastorate.

Finally, while addressing the pastorate, our Synod at large should seriously consider how to fund the education of her pastors. To simply adopt the secular education funding models and Federal student loans while lacking the compensation to refund these costs will have catastrophic results especially in the event of a major economic downturn. The costs of operating the seminaries may also be considered.

Ask your pastor how he’s doing financially. Find out and support him with the costs of his education. If we value a well-trained pastorate we should also be willing to pay for it.


The Pastor Debt Monster — 16 Comments

  1. It is bittersweet to know that I am above average for something (well above median). Thankfully, I am at a congregation that provides enough I can make my payments without issue.

  2. I would also include other church workers in this article as well. Our teachers are leaving the Concordias with a massive amount of debt as well. Most are working for even less than what the pastor is making. They are surviving by working a second job or living in small apartments. They are an important part in teaching our youth to be solidly Lutheran.

  3. But! If we pay our pastor a decently livable wage, how are we gonna pay for all our age-targeted programming and billboard advertising? What about a state of the art sound system and sending the youth to do prayer-skating at the local ice rink? Come on now, pastors don’t need to get rich. Priorities!

    *end sarcasm.

  4. My guess is that the efforts that will be made are going to be “too little, too late”. The problem has existed for too long and the reasons behind it are many. Let’s face it, the visible church is dying and the ramifications of that are going to be quite severe.

  5. I have always had a solution in the back of my mind. I think the Concordia’s ought to secularize more and have strong business and science programs. Once the schools start getting some students than the CUS schools raise tuition for any major/minor/adult class 2-3%. This money is used to subsidize the seminaries and provide financial aid for teachers. However, I think the pastors are really the ones who need help before the teachers. An undergrad degree shouldn’t put anyone over 30K of debt. Debt beyond the 30K is strictly poor financial planning and an abuse of the “God will provide” mentality. I also do blame the seminaries, districts, and pastors on part for not providing some serious financial counseling. Guys shouldn’t be leaving sem with more than 40k. Maybe if guys would wait a few years, the synod may finally accept the reality seminary costs are too high.

  6. The harsh reality is that the law is not being preached “full strength” so the gospel, if preached at all, is being received with a “what’s new?” shrug. the congregations are not interested in approaching those inactive and living-in-sin members who remain on the membership list and district presidents are buying into all the church growth crap in hopes of saving their districts.

  7. As someone who attended a Concordia and intermingled with a lot of church-work students, I can say that one of my greatest dismays is that many church-work students seemed lazzi-fair (at least publicly) with the debt that they are accumulating. Personally, I feel that the school could have been more upfront with students about how such debt can affect their lives. Our Synod asks pastors to have 8 years of school, and accumulate debt that can limit them financially for the rest of their lives; they have to ask the question how they can tweak the system.

  8. I agree that heavy educational debt can be an extreme burden on a pastor – especially if his spouse also happens to have accumulated something similar. But I suspect that much of this debt – especially that associated with family living expenses – has been incurred because the student entered the seminary without a solid plan for paying for it. Perhaps it would be best if the admissions process required that only a certain percentage of the student’s expenses may be paid with borrowed funds.

    Congregations routinely commit thousands of dollars per year to support individual missionaries, and would probably do the same for seminarians if approached.

    Perhaps we need an RSO for that purpose, similar to Mission Central in Iowa District West that operates solely to support missionaries. It seems like a workable answer is lurking out there waiting for someone to take the reins.

  9. boaz :
    we need that money for DP resort trips. Seminarians with kids can get food stamps.

    Hey boaz, the DPs were just being “missional.”

    How’s that “Church as a Business” model working out for you?

    District presidents and other “missional” LCMS leaders forget that few purpose-driven, emergent church preachers bother with college.

    The SMP program is not about saving money, but about DPs training emergent church theologians as they see fit, that is, according to the latest Evangelical fads.

    Do the seminaries have plans in place when the education bubble pops?

  10. @Derek Johnson #7

    This is true. I’m no poster boy for responsible education debt. I certainly could have eaten more pork & beans from a can, avoided purchasing the bibliographies for the classes, lived in a shoebox, and the like. You are correct. The financial aid folks have their hands tied and refuse to play the bad guy and say no to the loans.

    I don’t think most had any idea how they would pay those loans back.

  11. @Christopher Gillespie #10
    This is true. I’m no poster boy for responsible education debt. I certainly could have eaten more pork & beans from a can, avoided purchasing the bibliographies for the classes, lived in a shoebox…

    It’s all been done, and more. I had a horror of debt instilled in me by my Depression era parents, and passed it on to my children. They lived very frugally in their undergraduate years, worked part time and every summer, to contribute. I sometimes think now that we may have deprived some of them, as compared to their friends, but the fact is, they did not come out of their advanced degree programs burdened with a lot of debt.
    I hope they would say it was worth it.

    I know my oldest grandchildren are working to finance their graduate degrees; I sincerely hope the “4th yr.” at Fort Wayne has been equally wise.

  12. Dear BJS Bloggers,

    The LCMS is not willing to face up to its financial problems. This became evident to me when the 2007 convention just ignored the 2006 report of the “Blue Ribbon Task Force on Funding the Mission.” And this was before the Great Recession!

    There are “vested interests” that are preventing real answers to these problems. In other words, many LCMS personnel (I am including all of its various departments, schools, districts, and agencies) are afraid they might lose their salaries, benefits, perks, and jobs and will fight to retain those things. There are a few, but not enough, people on the synodical payroll who are willing to do the right thing to fix the problem.

    If you look at the LCMS Treasurer’s report for November 2012 (in the Reporter and Lutheran Witness as an “Official Notice”), you may note that he said that the CUS never had a plan to capitalize its schools or the system as a whole.

    You can’t offer reasonable tuition unless you have capital-sized fiscal foundations. What were they thinking? I don’t think the CUS and other LCMS leaders involved in expanding all the CUS schools were thinking, they were just hoping. And now church-worker students of all sorts have to pay the price in unreasonable debt.

    I said fifteen years ago that the synod and its students were unable to financially support all ten CUS schools (see LOGIA 6 #3 (Trinity 1997): 71-72). I have gotten more grief for that article in LOGIA Forum than just about anything else I have written. So that is how I know that there is significant resistance to solving this problem.

    Here’s a very simple proposal:
    – no church-worker student will acquire more debt than can be repaid in seven years (that’s a biblical figure from the 7-year jubilee of the Israelites),
    – repayment starts with ordination or commissioning,
    – debt-load is based on the lowest full-time church-worker salary in the synod factored against reasonable living expenses.

    That means mandatory re-channeling of the financial stream of donations from congregations, and adjustment of costs for all church-worker students, at every CUS and both seminaries.

    It’s Time for you overture-writers to get working on this one. Get your overtures into the Secretary of Synod by February 1, 2013 or by March 2, 2013 at the latest.

    Yours in Christ, Martin R. Noland

  13. Christopher Gillespie :
    @Derek Johnson #7
    The financial aid folks have their hands tied and refuse to play the bad guy and say no to the loans.

    I’ve visited both of our seminaries; one, I’ve visited twice. Admittedly, admissions and financial aid staff aren’t in the business of scaring off potential students, but…unless a prospective student does his own (rather exhaustive) due diligence, he very likely may not understand just how expensive the four-year seminary route really is.

    If I were to enroll in seminary next year, for example, I figure I would need somewhere north of $150K to cover the total academic and household expenses (including insurance, accounting for institutional tuition grant-in-aid, and ignoring the vicarage year altogether). Accounting for current savings and assets, projected part-time income during seminary, and other sources of income or anticipated aid, I’d expect to leave seminary with around $50K-$60K in debt. And yes, I considered the food and clothing co-ops, and the very affordable housing around the seminary, etc., etc.

    It’s very, very easy to imagine the debt loads some of our pastors carry into their first calls.

  14. @Rich #8 This is a great idea. The problem is t;seminaries already face declining classes. The church is also faced with the problem of the retiring pastors in the next five years is going to leave a true pastoral shortage which is not going to be made up for over night. Simply forcing guys to have a plan is not the solution. Many guys come in with plans which fall through for any number of reasons. What ever the solution which is found needs to address the continues rising of cost of seminary. Along with the decrease in financial aid and finally the very pricey insurance which is required of all the seminarians. These are the factors that need to be addressed. Simply trying to force men to have some kind of a plan does little to solve the problem and just decreases the number of men entering the seminary.

  15. and pastors when not helped by district or synod sometimes have to chose between bill pay and the health of family with possible terminal illnesses-the least of two evils when district/synod refuse to address sin in congregations and the pastor on principle leaves w/o work-decision for family needs first,but dp and mr stache go golfing and ignore the faithful and their concerns for truth and saving churches in the LCMS.These so-called leaders should be dumped for unfaithfulness when people call out and they do not answer the Mt 18 mandate to help address sin in churches-check out all leaders and president who claim to be confessional when they might have kissed a ring to get a nice position paid well with great bennies

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