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.

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