Mapping Your Financial Future

Below are several questions posted by The Fund For Theological Education(FTE). FTE's original documents can be found here. NES has developed a response to each question based on our unique perspective.

What should be expected regarding seminary tuition and financial aid?

It's likely that you will not be able to pay for your entire graduate education out of pocket. On face value, graduate theological education can represent a significant financial commitment for you and/or your family. But like everything else about these institutions, tuition and financial assistance vary greatly from school to school. In many Catholic schools, tuition is partially or completely covered by the diocese supporting the students. Similarly, a few denominational schools charge lower tuitions for students from their own traditions. Other schools offer full scholarships to students with academic and vocational promise. Unfortunately, most theological schools do not have the financial ability to offer significant tuition assistance to their students, leaving students with the primary responsibility for financing their education.

The good news is that theological schools are generally a "good bargain" in relation to other forms of professional education. According to ATS, the 2002-03 median tuition for theological schools in the U.S. was $9,000 for masters-level programs and $4,863 in Canada. Compare this to graduate programs in business, engineering, medicine and law and you will quickly realize that a theological education is well-priced in the educational marketplace.

Even so, ATS reports that 53% of spring 2002 graduates estimate that they will graduate with personal debt. More than half of these expected their theological education debt alone to total $15,000, and about one third expected a debt total of over $25,000.While these totals are decidedly lower than debts from other professional schools, and theological students can generally apply for federal loan assistance, theological graduates usually earn less upon graduation thereby making debt loads a significant consideration in the decision-making process.

NES: One of the key issues that seminarians must assess is their potential earnings after graduate school in relation to the debt they incur. For example, say you're going to borrow $15,000 a year. Multiplied by four years, a student will have $60,000 of debt which translates to roughly $500 in monthly payments. Now, if a student expects to have a post-seminary salary of $50,000 a year that would translate to roughly $2,500 per month in take-home pay. Using this scenario, a student is paying 20 percent of every paycheck into school loans. Financial experts state that debt payment should not exceed 8 to 15 percent of your expected earnings after graduation.

While it is hard to project what ministry setting you will be in after seminary, it is helpful to begin to understand the uneasy financial questions of post-graduation and making prudent and sound financial decisions before you start seminary.

The websites listed below can be used as powerful tools to gaining and keeping control over personal finances. Rather than duplicating the information that is provided on these sites, we are referencing the sites for you to visit and use.

1. Adventures in Education - http://www.aie.org/financial_literacy/index.cfm
2. U.S. Department of Education - http://www.ed.gov/finaid/landing.jhtml?src=ln
3. Feed the Pig - http://www.feedthepig.org/
4. FinAid - http://www.finaid.org/
5. Financial Literacy - http://www.financialliteracy101.org/
6. Mapping your Future - http://www.mappingyourfuture.org/money/
7. My Money - http://www.mymoney.gov/
8. 360 Financial Literacy - http://www.360financialliteracy.org/

Should you be interested in developing a budget or analyzing future financial revenue to projected educational debt, we have found the following organizations to offer helpful counseling and programs.

1. Citibank standard repayment chart and calculator
2. Information about repaying your student loan
3. Crown Financial Ministries - http://www.crown.org/
4. Dave Ramsey - http://www.daveramsey.com/