MLC’s Philosophy of Financial Assistance and Student Indebtedness

WE ARE GRATEFUL. Martin Luther College (MLC) is deeply grateful for the continued support of WELS. The WELS operating subsidy, which comes from WELS Congregational Mission Offerings (CMO), funds about 17% of MLC’s budget. We are also grateful for the gifts that come directly to MLC from foundations and individuals within WELS.

The blessing of this subsidy and these gifts, coupled with careful stewardship by the MLC Governing Board and administration, allows MLC to keep costs relatively low without sacrificing quality in our educational offerings or the student-life experience on campus. MLC regularly ranks at or near the top of “Best Value” college lists, and the average debt for MLC graduates is several thousand dollars below the national average for graduates of other four-year private colleges.

WE ARE CONCERNED. Though our student debt figure runs lower than average, it is still a considerable cause for concern and prayer. About 75 percent of MLC students graduate with debt. The debt for that 75 percent averages $27,000. If two of our graduates marry, the debt can double. Many of our graduates, therefore, enter their public ministries with a challenging burden—a burden exacerbated by the lower lifetime earning potential of called workers compared to college graduates in other fields.

This financial burden has a negative effect on recruitment. In a competitive college marketplace, we are at a disadvantage in rankings that use a return-on-investment framework. According to a 2019 Sallie Mae report, most high school students and their parents list college cost, often including consideration of return on investment, as the most important factor in their college choice.

While we remain convinced that the value of ministerial training—and the blessings of a life dedicated to gospel ministry—far outweigh financial considerations, we still must admit that the debt load carried by many MLC graduates likely has a significant negative impact on student recruitment.

WE ARE RESPONDING. To reduce the debt load of our graduates and to assure that nothing hampers the recruiting of future gospel ministers, the MLC Governing Board and administration invite all our partners throughout the synod to join us in addressing this challenge as wisely and aggressively as possible.  Under God’s blessing, we seek to:

  • Increase gifts to financial aid.

We will cultivate even more generous foundation grants, individual gifts, and special congregational contributions, such as those facilitated by the Congregational Partner Grant Program (CPGP). Such grants and gifts will significantly increase our ability to award merit-based and especially need-based financial aid, allowing us to offer more competitive financial aid packages to prospective students.

  • Enhance student financial literacy.

We will expand the current excellent program that teaches students wise stewardship of their financial resources. The MLC program, established before it was common practice at other college campuses, offers students guidance about summer employment, limiting working hours during the academic semesters, and sensible budgeting in a consumer-mentality culture. Recent research by the Trellis Company confirms the positive impact of financial counseling, and all such growth provides a blessing long after graduation.

  • Encourage family financial support.

We will encourage parents to help fund their children’s college education in ways consistent with their resources. In a growing trend, more parents are asking their children to bear an increasing percentage of college costs. While having students contribute to their college education does foster maturity, parents might not realize that student employment comes nowhere close to covering the full cost of college, and that government support has shifted almost entirely from grants to loans. When parents help pay for college, they provide a double blessing: reducing their children’s debt load and assisting their children to make a stronger beginning in public ministry.

  • Urge students to utilize government loans judiciously.

We will help students evaluate the long-term ramifications of student loans so that they don’t borrow too quickly or carelessly. We will also assist them with loan repayment options. When we combine greater financial literacy with increased financial aid and additional parental support, we will be well on our way toward fewer and smaller student loans.

OUR GOAL: Under God’s blessing, we would like to cut student indebtedness in half in ten years. The current ratio of debt to starting salary is 92 percent.[1] The goal is to reduce that ratio to 46 percent in ten years.[2]

In 2020 dollars, a $1,500 per year increase in each of three areas—student contribution, family contribution, and financial aid—would result in an $18,000 decrease in the average debt over four years. That would more than meet this goal! The challenge is not as significant as it may first appear.

OUR PRAYER: In this, as in all things, we ask God to help us. May our efforts ease the financial burden our graduates carry, remove hindrances to ministry recruitment, and raise an ever larger corps of Christian witnesses who are qualified to meet WELS ministry needs.

[1] This ratio lists the average indebtedness of the 2019 MLC graduate ($27,196) as a percentage of the 2019-2020 WELS salary matrix column C with 0 years of experience ($29,511).