ISSUE 4  l  August 2021

Debt-reduction grants enable clergy to lead from place of financial health

Reprinted with permission
By: Christa Meland
â–ºOriginal article


For as long as Rev. Derek Baum has been a pastor, he has been paying off student loans. Having attended Dakota Wesleyan University in Mitchell, South Dakota and then Sioux Falls Seminary, he acquired substantial debt in order to follow God’s call in his life. At one point, he realized that he probably wouldn’t be finished paying off his student debt until his oldest son was in college.

But thanks to three separate Investing in Leaders Resource Grants (formerly called Student Debt-Reduction Grants) he’s received from the Dakotas-Minnesota Area, he’s been able to pay down his educational debt faster than anticipated—and he just recently paid it off in full.

Baum, who serves First UMC in Aberdeen, South Dakota, is among 35 Area pastors who recently received a $5,000 grant. Clergy who have educational debt and completed a financial education class are eligible for the grants, which are made possible through a $1 million grant from Lilly Endowment Inc. that was awarded to the Area in late 2016. The Lilly Grant aims to help pastors develop stronger financial literacy skills, reduce or eliminate educational debt, and become equipped to foster a theology of generosity within their congregations.

The average student debt of this year’s grant recipients was $67,000, with some owing just a few thousand dollars and others carrying debt well exceeding $100,000.

“Pastors who are free from anxiety and fear about their personal situation are much better pastoral leaders,” said Diane Owen, Lilly Grant program director for the Dakotas-Minnesota Area. “This freedom allows our clergy to guide their churches to a culture of giving generously if they are secure with their own finances and ability to give.”

Reducing financial burden

Rev. Abby Kammann’s parents blessed her with the gift of paying her way through college. But when she got to seminary, the expenses were more than she’d anticipated. By the time she graduated and began her first job in ministry, her $400 a month student loan payment seemed impossible on her small salary. The three grants she’s received have made a huge difference in her financial health, and the last one enabled her to pay off her student loan in full.

“One of the most significant ways it impacts me as a pastoral leader is to model for my congregation generosity, to tithe, and also to offer back to God beyond that,” said Kammann, who serves Immanuel UMC in Corcoran, Minnesota. “When a church member was in need, I was able to contribute along with several others to meet that need. Had I still been burdened with this payment, I would not have been able to join my congregation in helping someone in need.

Kammann’s financial goals now include paying off all of her debt, helping her kids pay for college, and saving for retirement. No longer being burdened with student debt has helped her make progress on all three of those goals.

The grant has also been a godsend for Rev. Jason "Marty" Martens, who serves Celebration UMC in Brandon, South Dakota. With the help of the grant, he will be completely debt-free by February 2021.

“Student debt was a burden that was always on my shoulders and it was always something that limited my ability to truly speak into finances of the church or financial giving to the church because I understood and empathized with the burden of having debt and not wanting to ask people to give if they had that burden,” he said. “Receiving the grant has allowed me to reduce debt, to create flexibility in my tithing and giving to the church and other organizations, and to speak with more confidence as a pastor when it comes to both church and personal finances.”

This was the first year that Rev. Brooke Heerwald Steiner, who serves Excelsior UMC in Minnesota, received a grant. She and her husband have been plugging away at their debt for years, but because her student loan interest rates were the lowest, she hardly ever paid more than the minimum due each month—so her debt, although not incapacitating, was always looming.

Thanks to the grant she received, her student debt now stands at just $9—and she’s excited to log in and pay it so she can be done with this longtime obligation. She will be debt-free except for her mortgage, and not having student debt will enable her to add to the amount she and her husband are saving for their children’s college education. They also hope to pay off their home in 15 years, increase their own giving each year, and take trip to Europe.

“Grants like this entice pastors (I hope) to really invest in their education if they feel like it won't be a burden to them for decades after,” Steiner said. “There are a lot of stresses leading a church, many of them financial, that it's healthy for pastors to not constantly be struggling with their own finances.”

Baum echoed that sentiment.

“Pastors carry a lot of weight from an emotional side of things,” he said. “You will celebrate a birth and mourn a death in a matter of minutes. When you can take one less thing off the plate of a clergy, there really are no words to fully explain how much of a good feeling that is to have.”

Improving financial literacy

Completing a financial education course is one of the application requirements for the student debt-reduction grants. Each applicant can select the training program that best meets their needs and aligns with their values. Baum, Kammann, and Martens all selected Financial Peace University and said the principles it taught have stuck with them.

Both Baum and Kammann said having a monthly budget and sticking to it has become a key financial practice, and the concept of the “debt snowball” resonated strongly. This debt-reduction strategy involves paying off debt in order of smallest to largest. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.

Baum appreciated Financial Peace University so much that he’s made it part of the marriage classes he offers at his church. The first step the class urges is saving $1,000; each time a couple does this, the church gives them an extra $100—which Baum said provides an incentive to save and also increases the likelihood that a couple will remain connected to the church after they marry.

Baum, who will soon purchase the parsonage he lives in, is grateful for the accountability provided by his financial education class and is committed to helping his children and his church community benefit from what he took away from it.

“The $15,000 I received has been a huge blessing, but the biggest blessing is what I’ve learned in the process and how I’ll be able to share it with other people,” he said.

Christa Meland
Director of Communications
Minnesota Annual Conference of the United Methodist Church

Workers for religious nonprofits may now qualify for public service loan forgiveness

Under new regulations effective July 1, 2021, clergy and religious workers may now qualify for Public Service Loan Forgiveness (PSLF).   >>>continue reading

Our friends


Making student debt less of a barrier


The news about the federal public servant loan forgiveness program being extended to pastors broke in July. Our friends at ECFA provide helpful caveats in their article, and I think two kinds of movements in response make sense. First, we need to do what we can to share this news with our pastoral leaders, quickly...while secondly, not relying on this possibility to solve our student loan crisis.

Student debt, whether incurred in seminary or before, has been on the initiative radar since the beginning. Many of you have been working at this challenge for years now, in a variety of ways. Some grantees offer scholarships to students who are still attending seminary. Some offer Ministerial Excellence Funds (MEF) toward student debt payoff. Some invite congregations into the work of helping their pastoral leaders reduce their seminary debt. Great strides have been made.

The Missouri United Methodist Foundation compares benchmarks when a pastor first engages with the C2FM program to indicators two years later: the average student loan debt showed a reduction from $43,800 to $13,400 during that time. The Christian Reformed Church in North America offered a one-time “finishing well” grant to pastoral leaders who have faithfully paid down their student debt for more than a decade. The Church of the Nazarene highlighted the provision of the CARES act that made it possible for employers to make tax-free payments on their student loans, and the General Council of the Assemblies of God leveraged this new possibility to incentivize a matching program for congregations to partner with the grant project to make payments on their pastors’ student debt. The ELCA’s Fund for Leaders makes it possible for many seminarians to go to seminary without tuition costs; the response of those seminarians (below) speaks volumes.

No matter how it happens - via federal loan forgiveness, MEF awards, congregational generosity, strong partnerships - we believe that pastoral leaders who are freed from crippling student debt are more able to serve joyfully, creatively, and wisely, and are more resilient during troubled times.

So to all of you who are helping make student debt less of a barrier for so many of our pastoral leaders - Thank you.

Elise Barrett 
Coordination Program Director

We are pleased to share stories of hope from the grantees in this initiative. These were originally produced for our 2020 Team Leadership Gathering. This month, we are featuring the Episcopal Church Foundation.


2021 Team Leadership Gathering

October 6-8, 2021

Lilly Endowment has made the decision to host all 2021 events virtually. Registration is due to open in mid-August. We will not be meeting virtually for three straight days. However, please hold these days as we work to determine our format and timing. The invitation will be sent to the director, as is typical, with the option of bringing up to four team members. 

Peer Connections Opportunities

For Directors

These are completely optional conversation opportunities for directors to connect with one another. Topics depend on those who participate and what’s on your mind. All begin at 1 PM Eastern. An invite will be sent to directors the week before each offering. 

           -Sept 14th        -Nov 17th 

2022 Team Leadership Gathering & Celebration

November 7-9, 2022

We are so excited to meet in person once again! This event will include both cohorts, even if you conclude in 2021. Directors will be welcome to invite up to 4 team members to attend with him/her.


New website


Our website has been rebuilt with the hopes you will find it more useful and easier to navigate. It is hosted by the same platform (Kajabi) that we use for this newsletter and our events. Please take a moment to check it out. 

View new website