LSTC receives Lilly Endowment Grant to examine pathways to lower seminarian debt December 3, 2013

The Lutheran School of Theology at Chicago (LSTC) has received a $250,000 grant from Indianapolis-based Lilly Endowment Inc. to do research on three pathways to reduce seminary student debt. The grant builds on initiatives and methods used by LSTC that led to a reduction of overall student borrowing by 15% during each of the past two years. LSTC’s study will explore the practices of low debt load students, identify and test approaches to financial aid counseling, and examine ways to develop stronger support by congregations for students.

“The impact of debt is directly related to the size of the debt, limiting where graduates may serve, undermining their credibility to speak about stewardship, and threatening their chances for sustainable ministry. After years of working on this complicated issue and noticing a drop during the past two years in overall student loans, we feel that the three interrelated pathways in this project hold further promise for reducing student debt,” said James Nieman, president. “LSTC is grateful to Lilly Endowment for this generous grant to pursue a topic of widespread concern, not only for our seminary and church, but for many seminaries and denominations in the U.S.”

“Pastors are indispensable spiritual leaders and guides, and the quality of pastoral leadership is critical to the health and vitality of congregations,” said Christopher L. Coble, vice president for religion at the Endowment. He added, “The Endowment hopes that these grants will support broad efforts to improve the financial circumstances facing pastoral leaders so that pastors can serve their congregations more joyfully and effectively.”

Three pathways to lower debt

About one-third of LSTC students graduate with educational debt under $15,000. Debt load case studies will be examined to compare the profile of students with a lower debt load with the practices of those with higher debt. The first pathway of this project therefore studies which factors can be controlled by students to reduce debt.

The second, related, pathway is financial aid counseling. While fewer students are taking out loans, the average debt per graduate has increased. Developing the most effective method of financial aid counselling including the type and timing of the intervention to reduce borrowing is the goal of this pathway. Kate Fitzkappes, assistant director of financial aid says that changes to the way government loans are processed changed the way students decide on how much to borrow.  “We saw more students using online resources and fewer who talked with us about their circumstances. This made it more challenging to partner with our students on financial wellness issues” Fitzkappes said. “As economic and ministry climates change, we must adjust and find the most effective ways to promote financial literacy as it applies to our student body.  This grant will allow us to forge ahead in the right direction.”

Another important factor affecting student debt involves how support from congregations, whether for a specific student or general support of the seminary, helps reduce student borrowing. The third part of the study will examine the connections between congregations and students and the most effective ways to strengthen those relationships and the resulting financial support.

The project will begin in January 2014 and conclude in December 2016 under the direction of Laura Wilhelm, executive for administration, assessment and planning. Work on all three pathways will happen simultaneously. Written resources and public forums of student-generated methods for reducing debt will be among the outcomes of the project. LSTC will also implement, test and refine a new process for financial aid advising and identify, test and promote new strategies for increasing interaction between students and congregations. Insights from the project will be shared on the seminary’s web site and in its publications.

About Lilly Endowment Inc.

Lilly Endowment Inc. is an Indianapolis-based private philanthropic foundation created in 1937 by three members of the Lilly family — J.K. Lilly Sr. and sons J.K. Jr. and Eli —through gifts of stock in their pharmaceutical business, Eli Lilly & Company.  The Endowment exists to support the causes of religion, education and community development.  Lilly Endowment’s religion grantmaking is designed to deepen and enrich the religious lives of American Christians.  It does this largely through initiatives to enhance and sustain the quality of ministry in American congregations and parishes.  More information can be found at



Laura Wilhelm
Executive for Administration, Assessment, and Planning

Jan Boden
Director of Communication and Marketing

The Lutheran School of Theology (LSTC) is dedicated to bearing witness to the good news of Jesus Christ. Based in Chicago’s Hyde Park neighborhood, it is the leading urban Lutheran seminary training students for purposeful vocations in the global community. Aligned with its Lutheran heritage and built on a foundation of intellectual rigor, LSTC’s innovative, nationally recognized curriculum gives students skills for visionary Christian leadership in the public sphere.

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