Unless Congress acts this week, student loan rates will double when a bill expires that has kept them artificially low.
Senate leaders reached a tentative deal Tuesday to freeze student interest rates—scheduled to rise from 3.4 percent to 6.8 percent July 1—for one year. While Congress debates, many Christian colleges are seeking to reduce the burden of student loans. It's a growing concern as student debt nationwide has exploded to $1 trillion.
Brandon and Brenda Borders are beneficiaries of a program at Huntington University in Indiana that provides loan repayment assistance if a student's salary is low after graduation. Brandon works as the marketing director for a rural Internet provider, while Brenda works in youth ministry. "I'm going to be able to pay [my loans] back and do what I love," said Brenda of entering the program. "It was unbelievable. I was just full of joy."
The Borderses graduated with typical debt loads, says Jeff Berggren, Huntington's senior vice president of enrollment. The school's graduates have an average of $25,000 in loans, which matches the nationwide average. Those who receive assistance get quarterly reimbursement checks for, on average, $1,500—or $250 per month. Depending on their future salaries, students might continue to receive checks for the life of the loan.
Huntington offers the loan repayments through LRAP, a company that mostly serves Christian schools. Colleges pay into the program when they enroll students in it.
While Huntington enrolls all its students in the program, most schools use it for the 20 percent most likely to have trouble repaying loans. "If a student says they can't afford to take out loans, we say don't let the fear of debt prevent you from attending your first-choice college," said Peter Samuelson, LRAP's founder.
Most assistance programs are for students entering specific careers, such as medicine, education, or law. MedSend, for example, makes loan payments for medical missionaries. Federal government loans can be amended, including income-based repayment adjustments. LRAP, on the other hand, can apply to any student.
Seminaries are also hoping to use the program. Jared Christensen, director of admissions for Trinity Evangelical Divinity School, is hoping to partner with LRAP when it makes the program available to seminaries. "You're in a line of work guaranteed to have low income," Christensen says. "That makes it difficult to pay off debt."
Seminary debt is also a concern for many churches. The Assemblies of God recently began a repayment assistance program for graduates of its schools who enter the ministry. So far it has helped 70 graduates with its Next Generation Grant program.
"It's a pittance," said Bob Cook, president of the Alliance for Assemblies of God Higher Education. "But we're trying to help."
Used wisely, student loans can be a wise investment, says Chuck Bentley, CEO of Crown Financial Ministries. "Unfortunately, [loan repayment programs] only mask the underlying problem: the disproportionate cost of tuition relative to future income," he said.
Whether pursuing ministry, social service, or other careers, students need to consider their likely income when taking out loans. "Every worthy goal needs a good plan of action," said Bentley. "If a ministry job doesn't pay enough to meet one's student loan obligations, pursue employment offering higher compensation until the loans are paid off. Then consider fulltime, paid ministry work."