By: Christa Meland
Like many of us, Rev. Seth LaBounty is regularly asked to give to various causes—everything from youth mission trips to Girl Scouts and Boy Scouts. But educational debt has prevented him from being able to say “yes” to all of the opportunities that present themselves.
“A not insignificant portion of my paycheck goes to student loans,” said LaBounty, who serves Hartford UMC near Sioux Falls, South Dakota. “The quicker we can get that paid off enables us to live generously in ways we haven’t been able to.”
LaBounty is one of 38 Dakotas-Minnesota clergy who last year received a $5,000 student debt-reduction grant—and it’s made a notable difference in helping him work toward his goal of becoming debt-free. Another round of grants is being distributed this fall. Those who are eligible are active Area pastors with 10 years of ministry or less who have completed approved financial education in the last three years; clergy meeting these requirements can complete a first-time grant application or a renewal application by the extended deadline of Sept. 30.
The grants are made possible through a $1 million grant from Lilly Endowment Inc. that was awarded to the Area in late 2016. The Lilly Grant aims to help pastors develop stronger financial literacy skills, reduce or eliminate educational debt, and become equipped to foster a theology of generosity within their congregations.
“If we want our churches to be strong, healthy, generous congregations, our pastors need to model those behaviors,” said Diane Owen, area program director for the Lilly Grant initiative. “We know from research there’s a direct correlation between pastors who are financially healthy and literate and the financial well-being of their churches.”
The average student debt of last year’s grant recipients was $54,000, with some owing just a few thousand dollars and others carrying debt well exceeding $100,000.
Giving generously, leading by example
Rev. Jill Meents was living comfortably as a mortgage banker when she was called to pastoral ministry in 2012. Embracing her call and attending seminary forced her to deplete her savings, use personal lines of credit, and eventually apply for an educational loan.
She’s glad she made the decision she did, but it made a huge impact on her financial well-being.
“The monthly payment, although manageable, certainly affects what I have the ability to give to other sources—including the church,” said Meents, who serves Hillcrest UMC in Bloomington, Minnesota in a part-time appointment and continues to be a part-time mortgage banker.
Meents’ student debt-reduction grant has helped her make progress toward her goal of becoming debt-free minus the mortgage on her house. This will then allow her to replenish her savings account and give more generously.
“I think it’s hard for pastors to minister to our flocks about debt and the importance of being fiscally responsible when we know in the back of our mind that we’re still working through our debt issues,” she said. “It’s hard to lead by example when you’re not the best example, through no fault of your own.”
Rev. Jason Mehring echoed that sentiment. When he followed his call and became a pastor, he knew he wouldn’t be making a lot of money. But the burden of educational debt definitely hinders his ability to model the behaviors he talks with his congregation about.
“When you talk about the financial health of the church, you talk about giving generously,” said Mehring, who serves Mission Fargo, a new church start in North Dakota. “It’s hard to preach to this if you don’t do it in your own life. I definitely want to be someone who is preaching and also doing it…If we want our congregations to be generous, we have to be generous ourselves.”
Mehring just applied for a second grant and is now close to having paid off all his educational debt thanks to their help.
Rev. Hope Hutchison, who will begin serving Richfield UMC in Minnesota in September, didn’t have as much debt as many of her peers, but paying it off while working in a part-time appointment has been extremely difficult. The grant has enabled her to pay down most of her remaining educational debt and better live within her budget.
“We have this culture of mission over money,” said Hutchison. “That’s not a bad thing, but it sometimes means we neglect to talk about money at all or we never learn to talk about it well. When we do that, we neglect the topic to the point where we build a system that forces people to go into huge amounts of debt just to enter this profession. That financial literacy comes at such a high cost.”
Financial literacy changes mindset
Completing financial literacy training is one of the application requirements for the student debt-reduction grants. Each applicant can select the training program that best meets their needs and aligns with their values.
Both LaBounty and Mehring selected Financial Peace University and said the principles it taught have stuck with them. Others have selected Freed-Up Financial Living. (All clergy have access to free financial education materials through the Lilly Grant initiative.)
The concept of the “debt snowball” really resonated with LaBounty. This debt-reduction strategy involves paying off debt in order of smallest to largest. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance. He has also embraced the idea of investing money early and letting the time work for you.
Having taken the class has also allowed LaBounty to better minister to those in his congregation who are having financial difficulties.
“With Financial Peace University being so scripturally based, it gives me a great toolbox to work from when I have conversations with other people about stewardship and generosity,” he said. “I know how painful a burden debt can be.”
Mehring appreciated Financial Peace University so much that he’s going to be leading a class for his congregation this fall. It’s not just about changing their financial situation, it’s about changing their mindset, said Mehring.
“That helps their relationships, their family life, and the church because they’ll be more generous,” he said.
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