Understanding the Impact
of Student Debt

In order to gain a better understanding of the impact that student debt is having on Luther Seminary students and recent graduates, we sat down with Bill Silva-Breen, Director of Financial Aid. Bill has served in this role at Luther Seminary for over 10 years. In that time, he has seen how student debt loads are increasing and the effect debt has on students and their families as they prepare for ministry.

Q: What are the most important trends you've seen in your 10 years as Director of Financial Aid?

Silva-Breen: Last year, 73 percent of all graduates had student loan debt. That's up from 50 percent in 2000-01. For our graduating students who borrow, the average debt (including undergraduate debt) has risen from $17,000 in 1994-95 to $41,000 in 2006-07. That's a 141 percent increase over that period of time.

Q: Can you shed any light on how this debt burden is affecting students' early ministries?

Silva-Breen: The durations of their first calls are getting shorter because if the congregations are rural, near-rural or urban, they’re not earning much salary serving there. Many of our students are saying, "I can't serve rural, I can't serve inner city because of my debt." When students don't have debt, they are freer to accept any call.

Q: How much loan money have you processed in your years as Director of Financial Aid, and what is the impact of that on students?

Silva-Breen: I've been processing roughly $2.5 million to $4 million in loans each year. That's money that they could otherwise use to send their kids to college, that would create emotionally healthier families. It’s a lot of money that they won’t have.

Q: How long would it take a pastor with an average starting salary to pay back the average amount of student debt?

Silva-Breen: My guess is in the 15-to-20-year range. Some take longer.

Q: Why should folks in our church take this matter of debt seriously enough to increase their giving toward student scholarships?

Silva-Breen: It's the right thing to do. Our church requires eight years of higher education for our pastors. I think the church has a responsibility to participate to a greater degree in financing this process. Financially healthier graduates can only benefit the church.