Investing in the Future

As parents and students engage in some tough discussions about higher education and finances, an increasing number of families may wonder if a college education is out of reach. “The average family income has remained the same since 2008, but the cost of a college education continues to rise,” says Bethel University President Jay Barnes.  According to the National Association of Independent Colleges and Universities, more than 40 million Americans have student debt, with the issue affecting younger grads most of all: 65% of student loans are held by Americans younger than 39.

Worth the investment

But a look beyond the statistics provides some perspective—and encouragement—to families considering private nonprofit institutions like Bethel. “Because of generous institutional aid policies, private colleges remain affordable to students from all backgrounds,” states a February 2013 factsheet from the National Association of Independent Colleges and Universities. In addition, the factsheet continues, “the overwhelming majority of college borrowers have manageable loan levels,” with 88.7% of all borrowers (undergraduate and graduate students across all sectors of higher education) having debt of less than $50,000. And because students at private colleges graduate faster than their peers at public universities, they are more likely to avoid extra years of tuition and begin earning money in a career earlier, according to a Washington Post Weekly from May.

Regardless of cost, most experts agree that a college education is worth the financial investment. According to a May 2014 New York Times article, “Yes, college is worth it, and it’s not even close. For all the struggles that many young college graduates face, a four-year degree has probably never been more valuable.” The Pew Research Center concurs. In its 2014 report, “The Rising Cost of Not Going to College,” the center’s staff writes, “On virtually every measure of economic well-being and career attainment—from personal earnings to job satisfaction to the share employed full-time—young college graduates are outperforming their peers with less education.”

Bethel’s long-term strategies

Since the recession of 2008, Bethel leaders have recognized that families were facing financial hardship and made a commitment to increase financial aid. Bethel increased its annual gift aid budget for undergraduates by $18 million between the 2007-08 school year and 2014. That budget increase helps, but leaders also see the need to develop new, sustainable long-term plans. “We knew we needed to identify innovative strategies to help the university thrive in the years ahead,” says Barnes.

In February, Bethel unveiled a new vision statement and five strategic goals to help chart a course for sustainable success, with a strong, student-centric structure to serve students across all schools.One of the goals focuses specifically on creating a sustainable financial model for the university, with the

most significant recommendation involving the growth of Bethel’s endowment from $35 million to $250 million. “Building our endowment to $250 million is a stretch goal,” says Pat Brooke, Bethel’s chief financial officer. “But it is where a university of our size needs to be.”

Why is an endowment so important for Bethel? An endowment is comprised of restricted gifts from donors, meaning that the money can only be used for a designated purpose. The gifts are invested so that earnings produce an income stream that is independent of enrollment dollars. These earnings open up new opportunities for funding scholarships, endowed faculty positions, loan forgiveness programs, or other initiatives.

Bethel has the smallest endowment of the 17 colleges and universities in the Minnesota Private College Council, but it is also the only school that has moved its campus in the past 50 years. That move required an investment in bricks and mortar, a commitment to building a campus that invites and accommodates learning and community. Now Bethel turns its focus toward affordability, and the endowment is an important part of that plan. “We are at a point where we can build into our programs rather than physical buildings,” says Deb Harless, executive vice president and provost. “There is something appealing about the endowment that says, ‘We’re here, established, and now we’re going to be here for the next 100 years.’”

Immediate impact

While Bethel is committed to long-term, sustainable strategies for enhancing affordability, some changes have been immediate. This spring Bethel Seminary reduced tuition for some students by about 12% and is changing some financial aid practices, all with the goal of helping students better anticipate costs. “We are committed to making Bethel Seminary more affordable for everyone,” says David Clark, Bethel Seminary vice president and dean.

In the College of Arts & Sciences, a payment policy change will help families avoid financial surprises. Starting in fall 2015, all undergraduate students’ tuition must be paid before classes start, or students must be enrolled in a payment plan. And a subtle shift within Bethel’s Office of Financial Aid now introduces discussion about goals, loans, and financial aid packages earlier in the undergraduate enrollment process. As Jeff Olson, director of financial aid, points out, the time for those hard conversations is before a student enrolls.

Financially literate students

Financial aid staff members aren’t the only ones on campus working to empower students in the area of finances. A newly established financial literacy committee at Bethel is committed to helping students learn basic financial principles that will serve them during their college years and prepare them for the future. To that end, the committee has registered Bethel for access to CashCourse, an online tool provided by the National Endowment for Financial Education that’s brimming with helpful personal finance resources.

In addition, this spring the committee sponsored the first-ever financial literacy panel for undergraduates. Current students worked with the Department of Business and Economics and BethelBiz—a business alumni network that promotes excellence in the business community, in the classroom, and through relationships. The event featured Dean Junkans, recently retired chief investment officer at Wells Fargo Bank, who now serves as an adjunct professor at Bethel.

Attendees received guidance on everything from student debt to everyday financial decisions, and several spoke afterward about the need for this type of training for students. “Seeing my own need for financial literacy, I knew others probably had the same unspoken questions,” says Alyssa Andersen ’15, a business major and BethelBiz student liaison who helped organize the panel. “Financial literacy is especially important for me as a first-generation college grad, because my parents had a very different experience with finances when they were young adults.”

Organizational communication major Michael Rangoonwala ’15 sees the value in learning basic financial

principles as he graduates and moves into a career. “It’s vital for all students, including me, to learn principles in how to budget, save, and spend money wisely,” he says. “Creating good money habits now will help me transition after college when I have more responsibilities.”

Chad Boysen, director of the Bethel Fund, was part of the panel’s organizing team. He points out the larger goal of equipping students to think critically about the integration of their faith and finances. “Faith and money can be hard to reconcile,” he says. “We’re trying to be transparent and realistic so that graduates won’t have surprises. We often talk about Bethel being a place where students make their faith their own. We want the same to be true about their values and attitudes about money.”

Read the full Bethel Magazine story, including sources, statistics, online resources, and advice on planning for your college education.