The Student Debt Challenge

By Marcia ShetlerGraduates with Student LoansIn a month or two, commencement ceremonies will take place at colleges and graduate schools across North America. Can you imagine graduates walking across the stage and receiving another slip of paper besides their diploma? That document would be their student loan bill.

According to US News & World Report, in recent years seventy percent of US students graduated with student loans. So for every ten graduates you see filing past you, seven of them would receive that piece of paper. The Globe and Mail reports similar statistics for Canada, where four students out of ten might have no student debt. What might the numbers on those papers look like? In 2016, the average Canadian graduate had more than $25,000 in debt. In the US, it was more than $37,000.

Student debt creates many challenges:

  • weight-loss-850601_1280The University of Toronto reports that students who took out more student loans were more likely to have poor mental health in early adulthood;
  • Time Magazine says that student debt can delay major life events such as buying a home, getting married, or having children;
  • Time also says that graduates with debt may work more than they wish, including taking a second job;
  • and MarketWatch reports that those who took out loans to pay for higher education but did not complete their degree have the most difficulty repaying their loans.

But student debt doesn’t have to be part of your new normal. There are things you can do to avoid it. And if you’re challenged by student debt, there are ways to make it more manageable.

This month, the COMPASS Initiative will look at these two sides of the student debt challenge:

  • Get great insights every week on this blog and on our Twitter feed and Facebook page.
  • Grab your lunch or a cup of coffee and join us for a Live Chat with Darryl tip-jar-1796480_1280Dahlheimer, Program Director for LSS Financial Counseling—a partner of Everence—on Thursday, April 20, 12:30 p.m. Eastern time, 11:30 a.m. Central time, 10:30 a.m. Mountain time, and 9:30 a.m. Pacific time. Darryl will tell us about new student loan repayment options and share stories of experience and hope about this challenging issue.

Student debt can be a burden that affects our ability to live the life to which God has called us. It impacts how we steward what God has given us to manage and our freedom to be generous. Whether we are considering how to finance education or deal with the financial ramifications afterward, the key is seeking God’s guidance and choosing wisely. I hope the information shared this month will help you conquer your Student Debt Challenge!

About the Author

marcia shetlerMarcia Shetler is Executive Director/CEO of the Ecumenical Stewardship Center. 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, follow us on Twitter, and join the COMPASS community on Facebook.

Photo credits:

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.

Frugal Tips for Recent Graduates

During the month of May COMPASS  has been giving space for conversations and questions about “What’s Next?” Specifically we are thinking about budgeting and student loans during and after graduation and the life transitions that commonly begin during this month. Today we welcome back Grace Duddy Pomroy to the blog. This post previously appeared on Grace’s blog, and is adapted and used here with her permission.

graduationIt’s the time of year when graduation pictures fill Facebook and Instagram: a time of bittersweet endings and fresh beginnings for many people. Congratulations to all of this year’s graduates. I called this post “tips for recent grads” because we are just coming to the end of the graduation time of year, but really this is advice for anyone.

After you have just graduated you experience a significant life transition, making it an easier time to shift your money priorities, but you could certainly make this shift at any time. For young professionals, I am convinced that two of the best things that you can do with your money is to use it to invest in yourself and those you care about through repaying loans and saving.

If you are a recent grad, with student debt it can be tempting to wait until the end of your grace period to start paying your off your student loan. I would encourage you not to wait. When you get a full-time job and begin creating your budget, put your student loans in your budget right away. There are many online calculators that can help you figure out your monthly payment amounts for your loans. If you can’t afford making the payments right away, consider just paying the interest on the loans during your grace period. Any little bit will help in the long run.

After you move out of your grace period, get on a payment plan that works for you. If you can afford to pay at least the minimum on all of your loans, do it. Check into consolidation and income-based repayment plans if you qualify. Then make a plan to get out of debt.



I have a plan to pay off my student loans in 5 years (half of the recommended time). I am using the snowball method to get out of debt faster. I began by paying off my two smaller loans ($2,000 or less). I paid off the first one within a little over a year of graduation and then put the minimum payment from that loan towards the next smallest loan. Within about six months, I paid off the next smallest loan. Now, I am putting the money I had been putting towards that second smallest loan towards my next smallest loan which also happens to be the one with the most interest. I hope to pay off this loan with in the next year or two. Coming out of grad school, I felt overwhelmed by my debt and needed some quick wins so I started with my smallest loans. However, the smarter choice would have been to get rid of the highest interest loan first.

During a research project, I spoke with a man in his thirties who told me that he and his wife had decided not to focus too much on paying off their debt but instead to take this time to enjoy other opportunities, particularly travel. There is certainly a balance between enjoying your 20s and 30s vs.  paying off your loans quickly. You have to find the balance that is the best fit for you, your values, and priorities.

Once you have a plan for your debt in line, you can begin thinking about savings. Regardless of your debt level, you should always leave space in your budget to build up your emergency fund and long-term savings, even if it is just $20 a month. Beyond that you can begin to think about short-, mid- and long-range savings goals. Short-term goals (two years or less) might be saving for a vacation, computer, car, or even a wedding. Mid-range goals (five to even twenty years out) might include saving for house, dream vacation, a child’s education, etc. A long-range goal is generally retirement or another 20+ year goal. At this point in my life I am focused on short and long range goals, saving for my emergency fund, retirement as well as doing some fun short-term savings. There is almost nothing more financially rewarding than continually investing in a savings fund and achieving your goal.

When you are focusing on paying off debt, especially a large amount of debt, it can be tempting not to save. In most cases, this would be a mistake that could really cost you. It is important to have some emergency savings (3-6 months of income saved) or at least a modest rainy day fund ($1000+) before charging full speed ahead on your debt. While this may seem like a road block in the way of paying your debt, if you don’t have an emergency or rainy day fund any unexpected expense like an unanticipated car repair, medical expense, or travel expense can really throw off your budget and your debt repayment plan by adding more debt. Saving and paying off debt is a delicate balance but it is doable and worthwhile.

Join the Conversation: What is your plan for repaying and saving?

Grace headshotAbout the Author: Grace Duddy Pomroy is a Financial Education Specialist at Portico Benefit Services and previously served as Executive Director of Operations at Kairos and Associates, and Assistant Director for the Center for Stewardship Leaders and Luther Seminary. She is author of “Stewards of God’s Love”, recently published by the Evangelical Lutheran Church in America. She blogs regularly and you can follow her on Twitter.

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: Sea of Graduation of Caps and Snowball.

What’s Next? Budgeting, Graduation and Student Loans

Hi! My name is Timothy and this is my wife Allison.

A scene from May a few years ago of my wife Allison and I upon graduating from grad school.

Happy May! Where has the year gone already? With it being May, many of you are probably experiencing the joys (or challenges) of finals, preparing for graduation, or at least supporting friends and/or family who are going through them.

May is a time of transition for many. It is a month where the question, “What’s next?” is fairly common. With that in mind, this month COMPASS is giving space for that very question. We will share some thoughts and questions about budgeting, graduation and student loans.

So, what’s next for you? Are you graduating from somewhere? Beginning a new chapter of some kind? Are you wondering how you are going to finance this new chapter? Or, are you wondering how to budget around it and for your different expenses, wants and needs?

I am not graduating from anywhere this year, nor is my wife Allison. However, my brother is graduating from graduate school with two masters degrees, and one of our cousins is graduating from law school. Another is graduating from high school and will be starting college in the fall. A number of friends of ours are graduating from seminary. As our family and friends make these transitions, they also are in various stages of engagements with student loans: which ones to take, for how long, and how to budget to repay them.

Though my wife and I aren’t graduating this May, we are in discernment about the next part of her seminary program as she continues to study and prepare to be an ordained pastor. This means more budgeting conversations over pancakes for us, and continuing to assess our schedule of student loan payments and “what’s next” type questions.

Visit the COMPASS blog this month to find ideas for budgeting and taking “baby steps towards a financially balanced life” from Beryl Jantzi. We’ll also highlight a number of resources and tips related to loans and loan decisions, as well as unpack other questions you may have.

In the meantime, what questions are you wondering about as you enter these exciting times of transition in your life? What financial and life decisions are you thinking about?

Please join the conversation and let’s learn, wonder, discuss, discover and journey together as we contemplate together, “What’s next?”

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, and ESC on Twitter.