Evangelical Pastors Struggle With Student Loan Debt and Financial Worries, Recent Study Finds
Posted By Eliana Osborn on May 6, 2016 at 4:39 pm
The National Association of Evangelicals recently released a report documenting the financial realities straining the vast majority of pastors. Of the more than 4,200 pastors surveyed, a third of the pastors had significant student loan debt, with an average of $36,000.
While large congregations and book deals for mega church leaders may be what gets media attention, 55% of evangelical pastors have 100 or fewer in their congregation. The number of followers may not seem important, but the financial realities of a small congregation lead to significant stresses for these leaders. For many pastors, divinity school follows a separate bachelor’s degree, which, like with graduate school loans, can keep student debt growing. In 2013, President of The Urban Ministry Institute, Don Davis, complained about high seminary costs, noting an average cost between $35,000 and $50,000.
Student loan debt adds to financial insecurity of pastors
Like teaching or social work, careers in ministry are challenging for today’s college students. One study revealed that students majoring in theology or religion were among the most likely to have delinquent student loans. Davis says many graduates won’t go to work in urban or poor areas where there simply isn’t enough money coming in for them to live on—let alone service loans. The numbers simply don’t add up when you consider lifetime earnings and student loan debt.
John Duncan of Kentucky attended seminary as a second career in the mid-1980’s. He was 38, married, with two kids. Duncan was able to get through three years of schooling at Louisville Presbyterian Seminary without debt, thanks to a number of factors. Like many student pastors, after his first year, he “pastored a small church near Lexington that gave us a home, paid the utilities, and paid $100 per week to preach and visit sick people.” Today, this particular school offers free tuition to all students. However for a large share of student pastors, the costs of seminary training play a big role in student loan debt.
Nearly 30% of respondents have absolutely no personal savings, and a similar number have less than $10,000 in retirement savings. Low earnings and financial insecurity may be acceptable for new pastors, especially those without families, but as time goes on, they may feel compelled to find more stable positions. Less than half of pastors in the study received health care insurance coverage for themselves, just 43% and only 38% are allotted retirement or pensions.
The NAE survey only looked at senior pastors and included those of 19 different denominations. The vast majority of participants were male and white, with an average age of nearly 53. Without these parameters, debt levels are likely much higher, given increased debt trends among younger adults as well as for minority groups. For larger congregations, the pastors in the survey had been at their current posting for longer, which makes sense given the financial concerns of leading smaller congregations.
Study’s findings were a wake-up call for evangelical groups
NAE Project Director Brian Kluth acknowledges that the study’s findings were a wake-up call. “We will be working with denominations to develop clergy benevolence matching grants that can be used to help pay down or pay off student loans, help with medical expenses, or prepare for retirement. We will also be developing training modules that will help a pastor/family and their church move towards greater financial health.”
About 5% of current pastors are unpaid, and most with congregations under 100 have another job as well. Another concern unearthed by the study is a lack of confidence among pastors about how to handle finances, whether their own or their church’s. Financial literacy may be an important component of training, as it is part of the job for all but large congregations.
“Freed to Lead” is a new initiative from the NAE to support pastor financial health. Recognizing that worry and strain over money get in the way of other things, the plan will involve training and some financial assistance from the Lilly Ministerial Excellence Fund. The Lilly Endowment has several areas of focus, one of which is religion in American congregations. This specific fund gives to other organizations that handle grant making.