July 01, 2004 by Linda Dorr

As Madison and Scott committed their lives together in marriage, their hearts beat as one.  God had called them to the mission .eld, and they were glad to go. From Scott’s 6th-grade commitment by the camp.re and Madison’s commitment at an Urbana con­vention, they knew that they wanted to spend their lives among an unreached people.

Unfortunately, a combined $80,000 of student debt awaited them after college graduation.  Soon their .rst daughter, Sydney, was born, followed shortly after by Cameron.  The enthusiasm they felt at graduation waned under the medical bills, mortgage payments, and day-to-day struggles of raising small children.  Each month the $981 college loan payment seemed to smirk at Scott as he wrote out the check.  Eventually, like the seed that sprang up quickly but was choked out by the cares of this life, Madison’s and Scott’s call to missionary service died among the pressures of life and the need to wait many years to pay off their college debt.

Though “Madison” and “Scott” are compos­ite creations rather than actual persons, they represent many real people carrying a very real burden of student debt.  Where does such debt come from?  First, tuition rates are exploding at American universities. During the last decade tuition and fees at private and public universities grew by 40 percent and 33 percent respectively, according to a report by the State Public Interest Research Group (PIRG).  By comparison, the median family income increased only 12 percent. Tuition rates nationwide are rising approximately 5% per year on average.
Second, while tuition rates rise, grant aid contin­ues to shrink.  Since 1992 the federal government has shifted more federal aid into loans instead of grants. Whereas in the early 1970s grants com­prised the majority of student aid, loans now comprise the majority, according to the Center for Economic and Policy Re­search in its report on “The Debt Explo­sion Among College Graduates.”

Furthermore, whereas all previous federal loans were subsidized (meaning the government pays the interest that accrues during college), now only two-thirds are, adding to the debt burden.  By 2000, according to the National Center for Education Statistics, close to 70% of graduates with bache­lor’s degrees had student loan debt, compared to only 46% of graduates ten years earlier.  Banks and private loan companies have gladly jumped in, making educational loans even more available.

With tuition rates rising and grants shrink­ing, it’s no surprise that the result is a runaway increase in student debt levels.  According to the National Student Loan Survey (NASLS) conducted in 2002, the average student debt has nearly tripled since 1987, and has increased 236% since 1991.  Half of all graduates owe more than $18,400 at graduation ($16,200 at public universities). In addition, the traditional gap between student debt incurred at private and at public institutions is narrowing each year.  Many
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students from middle-to upper-income families have added private loans to federal loans, and PIRG reports that 23% have accumulated more than $40,000 in debt after four years in college.

Such levels of debt constitute a form of inden­tured servitude for today’s student generation.  For ten or more years after graduation, much of the family budget must be spent on debt repay­ment. (See the table on “How much will my student loan re­ally cost?”)  The NASLS survey in 2002 reports, “Over half of respondents reported feel­ing burdened by their loans, and a similar number would borrow less if they had to do it over again.”  In addition, the survey states, “Contrary to expectations, those who have been paying back their loans for at least three years report feeling much more burdened by repayment than do the others.”

Some recent graduates are “solving” the problem of unmanageable debt by re.nancing their col­lege loans so that they can be paid over 25 years they “signicantly changed their career plans be­cause of student loans”; by 2002 that number had jumped to 17%.  A 2003 study released by Col­legiate Funding Services found that more than 30% of college graduates said they had to take a job other than the one they really wanted in order to pay off their loans.  This trend has dispro­portionately impacted the public-service sector because of the traditionally lower-paid jobs service often and that their student debt well exceeds their annual salaries.

Mission agen­cies are recognizing the student loan challenge and are working hard to enable those with student loans to become career missionaries.  For example, Ben Sawatsky of the Evangeli­cal Free Church Missions and Scott Olson of Global Partners (Wesleyan Church) indicate that as many as 95% of applicants to their agencies are paying off signicant student loans.  Most agencies now allow an applicant to come to them with up to $10,000 of educa­tional debt or up to $300 in monthly payments on student loans. (They still require all consumer debt to be retired.)  Often there is a limit, such as three years, in which applicants must pay off student loans.  Wycliffe instead of the normal ten years.  This means that when their old­est children go off to college, the parents will still be paying off their own college loans!  Such a maneu­ver doesn’t reduce the burden, but spreads it out and adds a huge amount of accumulated inter­est that would normally be wiped out through bankruptcy.  Yet PIRG estimates that 39% of student debt holders Bible Translators al­lows up to $24,000 in individual student debt have loans that are unmanageable. While some agencies specify that debt repay-These levels of student debt also make a major ment must come out of impact on career decisions.  In 1997 only 11% the missionary’s annual of the NASLS survey respondents reported that budget, others allow funds for debt repayment to be raised over and above the normal budget.

The extensive scope of educational debt affects not only prospective mission­aries, but also prospective donors. If you’re a pro­spective missionary, and many of your friends are weighed down by student debt, how will you raise the additional amount needed to cover your educational debt?  In addition, the un­employment rate for college graduates under the age of 35 has doubled in the last three years, according to Jared Bernstein, senior economist at the Economic Policy Institute. With jobs harder to .nd in an uncer­tain economy, prospective missionary candidates should not assume that raising extra funds for debt payment – even when al­lowed by mission agencies – is the answer. 

Another set of problems faces a prospective mis­sionary candidate deter­mined to work off his or her debt for several years before candidacy.  First, many agencies af.rm the long-held principle that it’s better to begin mis­sionary service sooner rather than later because younger people often show greater flexibility as well as greater ability to learn languages and ad­just to other cultures.  In addition, waiting until your 30s to join an agency (once your loan is paid off) also shortens the effective years available for missionary service (before the needs of parents or teenagers may require a return to the home country).

Second, it has been observed that the longer a young adult stays in the United States, settling in to the “American way of life,” the harder it is to eliminate loans in all possible ways.  The pull up roots, raise .nancial support, and depart late Larry Burkett of Crown Ministries warned, for the mission .eld, for the inertia is enormously powerful.  Though some families have overcome such inertia, they represent the exception rather than the rule, and to expect this pattern to be­come the norm raises the hurdle too high.

My recommendation is that Christian students with loan obligations make every effort to pay them off within three years of graduation from college.  This could mean tremendous sacri.ce for a few years, but wonderful freedom there­after – freedom to follow their desired careers, and freedom to support mission­aries wholeheartedly and open-handedly. Those students who have not yet incurred loans should determine to reduce or “A student loan should only be considered as a last resort.” He stated that student loans – even the federal Stafford loans –  are “outrageously expensive and can lead students from financial euphoria into financial bondage.”

Today’s students are increasingly shackled by debt, much of which results from educational loans.  Before this out-of-control increase in the debt burden encumbers mission giving and mis­sionary candidacy any further, we need to act.

We also need to rethink the way we do education. Is the present system the only or best way?  Even participating in schools as they are, how can our educational goals be reached without mindlessly following the norm and ending up over $20,000 in debt?  Is there any hope for Chris­tian institutions to aspire to Princeton University’s commitment to a “loan-free” education for its students (until they match Princeton’s endowments)?  Or to emulate Rice University, which guarantees an under­graduate cap of $10,500 in need-based debt?  Are our desires for things we cannot afford (both consumer goods and “status” degrees) undermin­ing our ability to serve God and His kingdom effectively?  How can we learn, as Christians, to live a “wartime” lifestyle in educational arenas?  How can we teach our children to “owe no man anything except the debt of love”?