A Christian university’s response to student loan forgiveness

On August 24, the Biden administration announced that they would forgive up to $20,000 per borrower for households earning less than $125,000. Since our inception, Dordt University has benefited from the United States government’s support and desire to help citizens attain a college degree. There is little doubt that higher education is a critical driver of a strong, healthy democracy.

The government has supported the higher education industry and our institution in many ways, two of which are Pell Grants and federal student loans. There are distinct differences between these two programs.

Pell Grants are generally offered to students from lower-income families and do not need to be repaid. Nearly 25% of Dordt students receive these each year, and our historic graduation rate for Pell recipients is similar to our non-Pell students; some years, it has been higher. Nationally, the graduation rate for Pell students is 7% lower.

Federal student loans are precisely that—loans that usually need to be repaid. Throughout Dordt’s history, our students have received such loans, and this has been a tremendous aid to our students. On average 65% of our students participate in this loan program, with the average loan each year less than $6,000. Dordt’s long-term student loan default rate—that is, the percentage of students who do not make the required payments on their student loans—is less than 2%. For those who leave Dordt with a loan balance, the average has been under $25,000 for over a decade. Last year, our career outcome rate was 100%; Dordt students are landing jobs or getting into graduate school and paying back their loans. As we say in our mission, we want Dordt students to become effective kingdom citizens who “work toward Christ-centered renewal in all aspects of contemporary life,” and that includes within financial stewardship.

At Dordt, we work hard to make a Christian education as affordable as possible, and we know that many students have made financial sacrifices to achieve their Dordt degree. The Biden administration’s student loan forgiveness plan impacts our constituency in different ways.

For Dordt students or alumni who qualify for the student loan forgiveness program, we support you in taking advantage of this opportunity. We trust that the ethic of financial stewardship you were taught at Dordt will guide you to use these newly found resources well. Your federal loan servicer will help you to facilitate this process, but we stand ready to help in any way we can.

For those students who have recently paid off student loans or are in the process of doing so and have balances below $10,000, we understand your frustration. We are grateful that you’ve taken your obligation to repay seriously, and we recognize your efforts. This work ethic will serve you well for the rest of your life.

For students who did not take out loans, we know many of you worked diligently before and during college or had families who saved for many years to enable you to avoid taking out student loans. We laud the sacrifices you and your family made for you to achieve a college education; we understand that you are frustrated with this broad-brush forgiveness program, too. We will continue to advocate for our government to build smarter programs to support college completion.

At the policy level, the national conversation about student loan debt has mostly been one of talking past one another, rather than wise conversation about higher education policy. We are saddened that it has come to this. As I mentioned earlier, Dordt students learn to be wise stewards of their resources, to work hard, and to trust that God will provide—all of this is part of their education. What concerns me about the plan is it promotes fiscal irresponsibility.

As Dordt’s president, I have been on two national boards that lobby the federal government for smarter financial support of higher education. I currently am on the board of the Council for Christian Colleges and Universities (CCCU), and I am a past board member of National Association of Independent Colleges and Universities (NAICU). On both boards, I have regularly lobbied for a program called “Pell Plus” that is, to my mind, a much more effective way to use federal dollars to support college completion. In fact, with Dordt students’ history of repayment, I’ve even offered that the federal government can put us on the hook for Pell Plus if our students do not graduate within four years.

Student loan forgiveness is a divisive topic. We need to address the best ways to fund students who will lead our country in the future, but we need to do so with wisdom and stewardship. I do not think that this new policy is a wise decision for our country long-term. Dordt will continue to lobby for better programs that support citizens who want to earn a college education.

Dr. Erik Hoekstra

President, Dordt University