Reducing College Debt: a Group Ride. A community slides toward lower education loans.

debt-1376061_1280By Devon Matthews

When Jordan and Candace Shoenberger got married, they faced a problem common among young adults today: massive student loan debt. Together they owed $170,000 from their undergraduate education.

Both social workers, they had a monthly loan payment that was burdensome. They deferred the loans as long as possible and went back to graduate school. This only left them with more debt.

Jordan heard about a group of people who pooled money into a common fund called Relational Tithe to meet the needs of their community. It was founded by Christian activists Shane Claiborne and Darin Petersen. “It was modeled after what the apostles did in the early church. They held everything in common, and no one was in need. It’s an old idea, but a beautiful one,” Jordan said.

He and several friends created a way to use a common fund to reduce student debt. It was named SLED, the Student Loan Experiment (the D doesn’t stand for anything but makes it a catchy acronym).

Each month, members of the group contribute to a common bank account. A payment is disbursed to one group member to make an extra principal payment toward the student loan with the highest interest rate.

This extra payment shortens the length of the loan and decreases the total interest paid over the life of the loan. Each group member continues to pay the minimum payments on their student loans.

snow-1283278__180SLED’s first cycle lasted twelve months, with six people receiving two disbursements each. Over the course of the year, each receiving member was able to pay down an additional $2,000 of their outstanding debt, totaling $12,000 as a group. These extra payments saved the group a collective $15,000 in future interest payments, shortening their collective loans by eliminating ninety-six monthly payments.

The second cycle of SLED is in progress, with twenty-four participants and lasting eight months. Over this time, the group will distribute $8,400 to eight members. After this cycle is complete, the program will be re-evaluated and directions discerned for the next term.

SLED has been successful in grounding the group beyond financial aid for its members. The group has committed to building community and developing relationships with each other that go beyond assisting each other with debt.

Once a month, they share a meal and talk about financial topics that interest them. Past conversation starters have included, How did your family view money, and how has that shaped your own view on money? and, In what ways have you started to plan for the future and for retirement?

Group members reflect that belonging to SLED has created solidarity around a situation that often carries a stigma. Being in a community where members can be vulnerable about their financial challenges is freeing and creates space for positive and realistic conversations.

Group members are optimistic about SLED’s future. Kaleem Kheshgi imagines SLED becoming “a resource for sharing lessons and best practices in financial responsibility among young people with education debt.” He could imagine speaking in churches, high schools, and colleges, helping borrowers make wise financial decisions regarding debt.

John Davis envisions SLED encouraging inter-generational conversations about the realities of student debt and its effect on communities. “This difficult conversation could lead to a deeper level of vulnerability on other issues, as well as making use of the collective wisdom and experience,” said John.

This blog post is a condensed version of an article that was first published in Everence’s Everyday Stewardship magazine and appears in volume 18 of the Giving: Growing Joyful Stewards in Your Congregation magazine.

About the Author
Devon Matthews, a member of SLED, lives in Pittsburgh, Pennsylvania. He, his wife Kristen and many other SLED members attend Pittsburgh Mennonite Church. For more information, contact SLED at SLEDPGH@gmail.com.

About COMPASS
This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page, follow COMPASS on Twitter, and join the COMPASS community on Facebook.

Image credits: pixabay.com

Conquering Debt

credit-squeeze-522549_1280 (1)By Marcia Shetler

It’s been almost 80 years since the Disney movie Snow White and the Seven Dwarfs made its first appearance on the silver screen. The grandparents of many young adults might have been their age when they first saw it. The song of the Seven Dwarfs has had staying power and is familiar to every generation that has seen the movie since its first release: Heigh ho, Heigh ho, it’s off to work we go (I know, now you’re singing it in your head).

Sometime between 1938 and today, a marketer had the brilliant idea to tweak Doc’s, Grumpy’s, and Bashful’s et al. words. We hummed to new lyrics as we saw cars on the highway sporting bumper stickers and license plates that said, “I owe, I owe, it’s off to work I go.” Maybe you still see them now and then: they’re still for sale.

Unfortunately, in North America there is truth to those new lyrics, and debt is a part of everyday life for most of us. According to the investment website The Motley Fool, the average amount of debt for US households in 2015 was calculated at $90,000 including households without debt, and a $130,000 average when debtless households are removed. In Canada, the Globe and Mail reported statistics a bit differently, saying that at the end of last year Canadian households held more than $1.65 in debt for every dollar of disposable income. Either way, you get the idea: conquering debt is difficult for many North Americans. Millennials face a perfect storm of challenges: lower entry-level salaries and benefits, never-before-seen levels of student debt, and a conditioned consumer palate that makes it difficult to do without.

black-and-white-1498213_1280Putting a C-clamp on your wallet, though, isn’t really a practical solution. But this month, this blog and other COMPASS resources can start you on the right path to conquering your debt. Each week new articles here on the COMPASS blog will provide practical ideas, personal reflections, and spiritual connections to faith, finances, and conquering debt. Follow our Twitter feed and join us on Facebook all month long for great curated content on the topic. And learn about resources on the COMPASS web page that you can use for further in-depth study.

Finally, join us in a Live Chat with Darryl Dahlheimer, Program Director for LSS Financial Counseling, for “Conquering Your Debt: the Overlooked Key to Faith and Finances” on Wednesday, September 28 at 8 p.m. Eastern, 7 p.m. Central, 6 p.m. Mountain, 5 p.m. Pacific. Debt stress is the #1 identified financial problem for many families, but few know about the special resources to help get debt-free faster. Debt repayment is one area where “do it yourself” can lead to a dead end; trustworthy help is available. This Live Chat will share specific resources for each type of debt, including Debt Management Plans (DMPs) for credit card debt, available at nonprofit certified agencies, and income-based repayment and forgiveness options for student loan debt. Get free of debt faster, while building a good credit score, and avoiding heavily advertised “help scams” such as debt settlement and refinance schemes. It’s free! Register today at stewardshipresources.org/compass-live-chats. People of all ages are welcome!

The COMPASS Steering Committee and I look forward to journeying with you this month as we meet each other on Facebook, Twitter, and at our Live Chat, to gain new insights into Conquering Debt!

About the Author
marcia shetlerMarcia Shetler became the Executive Director/CEO of the Ecumenical Stewardship Center in March 2011. She holds an MA in philanthropy and development from St. Mary’s University of Minnesota, a BS in business administration from Indiana Wesleyan University, and a Bible Certificate from Eastern Mennonite University. She formerly served as administrative staff in two middle judicatories of the Church of the Brethren, and as director of communications and public relations for Bethany Theological Seminary in Richmond, Indiana, an administrative faculty position. Marcia’s vocational, spiritual, and family experiences have shaped her vision and passion for faithful stewardship ministry that recognizes and celebrates the diversity of Christ’s church and the common call to all disciples to the sacred practice of stewardship. She enjoys connecting, inspiring, and equipping Christian steward leaders to transform church communities.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

Image credits: pixabay.com

A Word to all Recent and soon to be Graduates

Congratulations, graduates! You have studied and grown, and are now ready to be sent out or start new chapters. For some of you, this may mean your first full-time adventure in the working world. For others of you, this may mean moving cross-country. For others, it may mean the transition from one school and degree to another and further study.

Whatever your chapter and transition looks like, congratulations! Your hard work and dedication deserves to be praised.

graduatesMuch has been shared on this blog (and will continue to be shared) to spread light on thinking about faith and finances. COMPASS has and will continue to be a place and resource to think about student debt, the different challenges of finances, and yet the hope and promise of abundance that we share in our collective faith.

Today, I don’t want to spend much time thinking about these challenges and bills—some that you are likely already facing and paying—and others—such as your educational debt—which may become due after deferment in about six months.

Rather, today I want to encourage you to give thanks: to celebrate and be joyful. Give thanks for your focused study. Give thanks for your family, friends, and loved ones who have supported you up to this point. They may have helped buy you dinner, get your study food, be the listening ears to talk through the challenges of life away from home at school, or shoulders to cry on when things didn’t quite go as you had hoped. These people—your network and community—have been a big part of your journey to this graduation. Thank them. Celebrate with them, and allow them to celebrate with you.

Congratulations, graduates! May your discernment and transitions into whatever lies ahead be blessed.

A Personal Word of Thanks

In the spirit of giving thanks, I too wish to give thanks today. I have recently received an exciting call to serve as the new Director for Stewardship of the Nebraska Synod of the Evangelical Lutheran Church in America. In my transition into this new chapter, I will no longer be serving as the Communications Associate for the Ecumenical Stewardship Center (ESC).

I am grateful for the opportunity to serve in this way these past 2 years. I am tremendously grateful to Marcia Shetler, the Executive Director/CEO of ESC for this opportunity. I am also excited to share that though I will no longer be serving in this capacity; I will continue as a committee member for COMPASS and ESC and will continue to offer thoughts and perspectives on this blog about once a month as a volunteer contributor. I look forward to continuing the faith and finances conversation with all of you well into the future.

timothy headshotAbout the Author: In addition to these roles and news, Timothy Siburg also currently serves as a congregational mission developer, among a few other roles. He blogs regularly on his own blog as well.

Image Credit: Graduates

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

After Graduation… Student Debt?

After my wife Allison's and my most recent graduation.

After my wife Allison’s and my most recent graduation.

As the calendar turns to May, many students across the United States and Canada are preparing to graduate. Some are graduating from college or graduate school. Many others are preparing to graduate from high school, and then either enter the workforce or continue their educations in college.

All of these graduations are major life achievements worth celebrating. So in some ways I don’t want to be the bearer of bad news, but graduation can also mean it’s time to really look at and prepare for paying back your student debt.

For high school students preparing to begin college or further study, higher education loans are likely the first ones you will be taking on in your life. Most student loans require you to complete some kind of basic education about the loans, including learning about the life of the loans and their cost often online in a half hour or less.

This introductory information is helpful, but if you are like I was when I graduated from high school a decade ago, you may complete the online “training” with little more thought than going through the motions. Had I paid more attention, I would have better understood the potential for long-term student debt.

Those of you graduating college and entering the workforce will likely have a “grace period” on your loan payments upon graduation. After that period you will be required to make regular payments on your loan debt. Spend some time determining what those payments are and how they are structured, including the amount of interest. If able, I recommend beginning paying them off as soon as possible as to cut down on the amount of accrued interest.

Those who graduate from college and continue education with graduate study can place your school loans in deferment because you are continuing your education. However, if you are working while a student, it might be wise to make some kind of payments toward your student loan debt to at least reduce the cost of interest. (Not to mention that your student loan debt may continue to increase if you have added loans for your graduate education.)

These nuggets and observations are ones I have learned from experience. They are not necessarily bad things, but it’s helpful to have awareness and understanding of them.

Returning to graduation, congratulations on your studies and best wishes on your life’s journeys and next steps!

As we celebrate the graduation season during May and June,

  • What questions do you have about student loans and student loan debt?
  • What things are you wondering as you make final decisions and preparations for what’s next?

These are the questions that COMPASS will be exploring over the next few weeks. Please join the conversation.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

Higher Learning and Student Debt: Is it Worth It?

During March, COMPASS has focused on “Managing Debt: Loans and Money in March,” including last week’s original live chat with Sandy Crozier. Today, I offer some personal thoughts and questions about student loan debt as we continue the faith and finances conversation, specifically this month about debt. 

Timothy and his wife Allison on the campus of their undergraduate campus where they met, Pacific Lutheran University.

Timothy and his wife Allison on the campus of their undergraduate campus where they met, Pacific Lutheran University.

Before leaving the Pacific Northwest to study and complete my first graduate degree, I was a bit nervous about the potential student loan debt I was about to commit to. I shared my thoughts with my former economics professor when I saw him at my undergraduate school’s bookstore. He told me, “Timothy, it’s just money. It’s just money. It’s an investment.”

However, the increasing cost of higher education—and the debt students are taking on to complete degrees—are causing some to reconsider if the investment is really worth it. According to the Wall Street Journal, 2015 US college graduates accumulated the highest average student loan debt in history, a base average of $35,000 per graduate school graduate and $23,000 per baccalaureate graduate. It is projected that 2016’s class will face an even higher total.

It is not unheard of for those earning professional degrees to graduate with six-figure student debt, including doctors, lawyers, and yes—clergy. Many institutions of higher learning—including seminaries—are trying to curb costs, but the numbers are daunting. With loan totals so high, it is mathematically possible that one might work their entire career and never do much more than pay off their student loan debt. A report by Goldman Sachs suggests avoiding “mediocre colleges”; steering away from lower-paying majors like arts, education, and psychology; and considering other forms besides college education to prepare for a vocation.

Nonetheless, my generation—the Millennials—have the highest percentage ever of college-educated persons, according to a White House study. In our household, my wife Allison and I hold 3 baccalaureate and 3 graduate degrees between us, and Allison is finishing her masters of divinity program this spring. We make our monthly payments, hope for some relief, and trust that in time, the costs will be worth it for our vocations and careers.

Theologian Frederick Buechner has written that “vocation is where our greatest passion meets the world’s greatest need.” As God’s people, I believe one pursues an education for opportunity and continued learning, and also to follow God’s calling or vocation. I believe that when one senses that they have gifts or passions for meeting the needs of the world, their neighborhood, or society, and when they most fully follow that call, it may lead to school or extended study. It is not always a call to become wealthy, sometimes far from it, especially if student loans are a part of the process. But if one is called, they are also called to trust that they will live in the abundance of God.

So when I think about my professor’s advice in the bookstore, I believe deeply that he was right. It hasn’t always been an easy path, but the investment has been and will continue to be worth it for me at least because it has led me to create connections, to learn, and to have experiences I couldn’t have dreamed about without the education I have been blessed to receive.

If you are looking for ways to reduce your debt—student and otherwise—check out the recording of the recent COMPASS Live Chat on managing debt led by Sandy Crozier, Stewardship Development Director for the Free Methodist Church in Canada.

What has your experience been like with student loan debt? How do you live faithfully while taking it on, or working to pay it off?

timothy headshotAbout the Author: Timothy Siburg is the Communications Associate for the Ecumenical Stewardship Center and focuses especially on the center’s COMPASS initiative focused on creating conversations and resources for faith and finances among younger Adults and Millennials. Timothy also currently serves as a congregational mission developer, among a few other roles and blogs regularly on his own blog as well.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

Managing Debt

A new part of the COMPASS resources this year are live chats with thought leaders on the month’s theme featured on the blog. During March, COMPASS has focused on “Managing Debt: Loans and Money in March.”

Sandy Crozier, Stewardship Development Director of The Free Methodist Church in Canada

Sandy Crozier, Stewardship Development Director of The Free Methodist Church in Canada

This past week Sandy Crozier presented on Managing Debt offering tips and ideas for how to repay debt, have emergency savings, and to be financially fit. The recording of the chat is available here to watch the discussion and gain Sandy’s wisdom.

Please note, as this was the first COMPASS Live Chat there were a few technical issues in the first 5-10 minutes of the recording, but after that, it worked well.

Enjoy the presentation, and please share any thoughts, questions, or comments on the topic that you may have here in the questions and we’ll continue the faith and finances conversation about managing debt together.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

Managing Debt: Loans and Money in March

As the calendar turns to March, COMPASS is focusing on debt management this month. You will hear perspectives from financial advisors, debt experts, and faith based financial voices as well. As we set the stage for this conversation, it is important to briefly articulate some of the different types of debt we might face.

debtCredit Card Debt

A couple of years ago, about 6 out of every 10 millennials did not have a credit card. Since then, that ratio has changed somewhat. One thing that does seem clear is that millennials as a generational group lack some credit card knowledge, especially as they relate to credit scores.

Student Loan Debt

Among Millennials, student loan debt is a major generational challenge because of the well-documented increase in the cost of education over the past two decades. Natalie Kitroeff recently noted “Four Ways Student Debt is Wreaking Havoc on Millennials.” Natalie notes that:

  • Student debt seems to dampen home buying
  • Young people are delaying starting families
  • Millennials are saving less than they could be
  • College loans make it hard to be financially healthy

How do we manage these and other kinds of debt? How do we faithfully give and live when facing the reality of debt?

These are questions that there aren’t easy answers to. For example, most of the above observations are true for my wife Allison and me. We have found that it is most helpful to remember the reasons for the debt in the first place.

We have yet to buy, or even look for a home because of our educational and vocational plans as we prepare to be a pastor (Allison) and a rostered leader in ministry (me). We have taken on this debt largely because we believe that our education matters, and that we are called to serve in capacities where an education will be invaluable. So in this sense, these loans are and remain an investment on our part in our present and future.

Conversations about Debt

Sandy Crozier, Stewardship Development Director of The Free Methodist Church in Canada

Sandy Crozier, Stewardship Development Director of The Free Methodist Church in Canada

This month COMPASS is beginning a new initiative offering a monthly conversation in real-time on the month’s theme. The first conversation will center on topics related to debt and how to manage it. It will be held on Tuesday March 22nd at 8pm EDT/5pm PDT. Sandy Crozier will be our topic leader. Sign up for the Live Chat at https://stewardshipresources.org/compass-live-chats. If you have questions that you would like to discuss, please let us know in the comments, via Facebook or Twitter, or by email.

What questions do you have about debt and managing it?

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

Image Credit: Debt