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.