Dr. Stephen Chambers explains the Student Financial Aid Crisis
Seminaries in North America have been hammered by the recent storm of tough economic conditions. The current issue of In Trust, a magazine for leaders in theological schools, reports that the value of higher education endowments fell 23% in the first five months of fiscal year 2008-9, following a 3% decline in 2007-8. That’s a huge decline, and its effect is devastating here at CLS because, like many seminaries, we rely heavily on our endowments to fund our programs.
Actually, the decline in the value of our endowments isn’t the real problem, because we’re not interested in selling these funds. The real problem is that these market conditions have dropped our endowments’ earning potential to almost nothing. Consider this: In the past year, we have received a total of $1,632 in endowment earnings from the seminary’s own endowments and from those held by LCC in our behalf.
Our seminary’s financial aid program is reeling from this loss of income. Here’s why. Our endowments usually provide more than half of the money that helps offset our students’ academic costs. In fact, in 2007-2008, income from the endowments contributed $40,747 out of the total of $71,159 we received for financial aid—57.3% of the total. So this year, we’ve received about $39,000 less for financial aid than last year, just looking at our endowments alone.
If this drop had been offset by other sources of income, things would be fine. But we have just one other source of financial aid money: gifts from congregations and individuals. And the news there has been equally bad. Most years we receive gifts in the range of at least $30,000 to help students with their academic expenses. In 2007-2008, the total was $30,312. So far this year, this income too has nose-dived. As of the end of May, we had received just $17,408. This is a drop of $12,904 from the previous year—meaning that we had received only 57% of last year’s level of this type of income, with a month to go in our fiscal year (it ends on 30 June).
So overall, here’s where we’re at. In 2007-2008, our total financial aid income was $71,159. So far in 2008-2009, it’s $17,969. This is just 25% of what we received the previous year (25.3%, to be exact). Financial aid income as a whole has dropped by 75%!
Now, we managed to get through this current academic year without forcing our students to feel the pinch too much, because we were able to draw on a reserve of funds that had been accumulated in earlier years when income, sometimes at least, exceeded disbursals. At the start of this academic year (1 July 2008), the accumulated surplus was $64,600. However, because this year’s income has been so low, we have spent almost that entire sum. As of 31 May 2009, the total amount of money available for financial aid, from all sources, was just $6,782. Never before has the seminary’s financial aid cupboard been this empty.
Basically, our financial aid department is broke—with a full batch of students due to arrive in less than 3 months. We expect that there will be 16 students here in late August, studying for the pastoral ministry full-time on our campus. Divided among them, the money that’s available right now amounts to $423.88 per man. This is only 5.4% of an average year’s academic costs of $7,870 per student. To flip the figures around: at this point it looks like each man will have to come up with some way to cover 94.6% of his academic costs “on his own.”
The situation is a little better in terms of his living costs. The seminary has a program that invites congregations, groups, and individuals to “Adopt A Student” for one academic year at a time. This year we had 50 sponsors take part in this program. They generously gave a total of $39,615 to help our students pay their living expenses. For this year’s 17 full-time pastoral students, that was an average of $2,330.29 per student—$194.19 per month. On the one hand, these dollars were extremely important in helping them pay for their rent, food, and so on! On the other hand, when you consider that the living costs for a single student living a frugal life are at least $1000 per month, 1 this Adopt-A-Student money doesn’t go very far. For married students with children, the shortfall is even worse.
So here’s a summary of the whole story, from a single student’s point of view. His total bill for one year of studies (academic costs + living costs) is conservatively estimated at $19,870. Right now, he faces the prospect of receiving a total of $2,754.17 from the seminary (financial aid + Adopt-A-Student gifts) to help with these costs. For the other $17,115.83, it looks like he’s going to be pretty much on his own. Yes, each of the Districts of Lutheran Church-Canada provides some assistance for seminary students from its area, and many congregations do the same for students from their midst. But even so, coming up with $15,000 or more for a single year of studies is a huge problem for each student to face.
What can be done to ease our students’ burden? Three things.
First, the seminary needs “new” gifts for financial aid, in any amount, small or large, one-time gifts or regular contributions. These go directly to help pay our students’ academic costs, raising the currently anticipated annual assistance per man from just $423.88 to a more useful level. Can you help? Any gift you can give will be most thankfully received.
Second, the seminary also needs “Adopt-A-Student” sponsors who will partner with individual students to help them with their living costs in the coming year. Last year’s sponsors combined to help each man to the tune of $194.19 per month. Can we exceed that level this year? Again, any gift you can pledge, or give right now, will be most appreciatively received.
Third, the seminary is prepared to divert to our financial aid program up to $50,000 of the gifts we receive for “general purposes” (that is, operating expenses) this coming year. Obviously this would hurt the seminary’s operations in other ways—but given our bedrock commitment to supporting students who desire to serve the Lord in the pastoral ministry, we feel we have no choice, without a substantial influx of gifts and pledges from the church-at-large.
Thank you for whatever you can do to help ease this crisis. May the Lord bless us, together, as we serve Him by preparing “servants for Jesus’ sake” (2 Cor 4:5) here at CLS.
1 Based on: current rent for a 1-BR basement suite ($500), food ($150), car insurance ($125) & gas ($100), phone & cable ($50), clothing ($25), and miscellaneous household costs ($100).
Dr. Stephen Chambers
Dean of Student Life / Director of Financial Aid
How you can give:
- The “donate” button on this web site gives you the ability to make donations to Concordia Lutheran Seminary with your VISA or Mastercard credit card. We’re also listed at the CanadaHelps web site as a recipient organization.
- You can also sign up for regular donations through the Personal Pre-Authorized Debit Plan.
- We are still delighted to receive cash (don’t send it through the mail, though) and cheques as well. Send in a general contribution of any size and designate its use (student financial aid, for instance).
- Make a commitment as a congregation or an individual to direct on-going giving to one of the Seminary’s students in the Adopt-a-Student program.
- Commit a specified and scheduled pledge through Partners in the Gospel; contact the Development office for more details.
- Include Concordia Lutheran Seminary in your will, bequests, or insurance beneficiary assignments to benefit the Seminary.
- Establish an endowment that specifies which component of Seminary costs (students, operations, capital or something else) will benefit from the yearly earnings.
- Form a group of Guild members in a local congregation and meet to gather resources for the Seminary’s students.
- Collect and bring or send in food stuffs for the students’ Food Pantry.
