Affording College: Before, During, and After


hand-1840039_1920By Beryl Jantzi

There is an old adage that says, “The best time to plant a tree is 20 years ago. The second best time is today.” The same could be said about preparing for the financial realities of paying for college.

Preparation is not a once and done exercise. Preparation is ongoing. One misconception is that preparing for the financial obligations of college is only about saving beforehand or paying off debt once you graduate. In reality, there are several points along the way to redouble your efforts to get as good an education as possible in the most cost-effective way as possible.

There are three stages in Affording College, and each includes proactive steps you can take throughout this journey.

1. Before: for perspective students

  • Know what financing is available. Educate yourself about:
    • Federal loans
    • Private loans
    • Subsidized and unsubsidized loans
  • Shop and Compare:
    • In state vs. out of state costs
    • community college vs. state university vs. private school costs
  • Budget now:lawn-mower-938555_1280
    • Get information on tuition and living expenses for various schools and on campus and off campus costs for various regions of the country
    • Parents: Start 529 plans as early as possible
    • Youth: Consider part-time jobs and summer work to save for college
    • Monitor your debt from year to year
  • Apply, Apply, Apply:
    • Research sources of grants and scholarships, and business scholarships available through parents employers and local civic organizations
  • Do your homework on career interests:
    • Know the first year earning potential of your career of choice to help determine how much you can/should borrow. (Rule of thumb: borrow no more than the entry income of your career of choice)

2. During: for current students

  • Don’t stop looking for scholarships:
    • Scholarships are not just for freshman
    • Return to organizations that may have turned you down for your first year and reapply
  • Don’t take all the loans you qualify for unless you absolutely need to. Borrow as little as necessaryapple-1851464_1280
  • Look for entry level internships for your career and major. Experience will matter
    when it comes to interviewing for work
  • Always know what you owe:
    • Monitor your total debt from year to year
    • Set a limit on what you can borrow based on your career of choice and your first year earning potential

#3 After: for those entering the working world

  • Know the repayment options for all your various loans
    • Prioritize increased payments for highest interest loans and aggressively take on one loan at a time while paying minimum amounts on the others
    • Discuss consolidation of private loans to lower interest payment. Do not consolidate Federal loans which typically have lower interest rates
    • If you are struggling to make payments, do not stop making payments without talking directly with your lender. Forbearance options exist
    • If you can accelerate payments it will reduce total interest paid over the length of the loan

If you find these guidelines helpful, consider viewing three short videos related to these three stages at www.everence.com/college. They are based on the lives of Carol, Erica, and Justin. Each of these students will speak in more detail to the realities of each stage of your college experience.

For more information contact me about additional resources to help you with your college journey at beryl.jantzi@everence.com.

About the Author

Beryl Jantzi and familyBeryl Jantzi serves as the stewardship education director for Everence, a faith-based financial services company of Mennonite Church USA, which serves all who are interested in integrating their faith with their finances.

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.