Opinion: The stake in federal aid

Mennonite colleges depend on government money, for better or worse

Aug 31, 2015 by and

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The Supreme Court ruling legalizing same-sex marriage may have placed many Christian colleges on a collision course with their largest funding partner — the U.S. government. Already facing significant financial challenges, these institutions could be forced to re-examine their core values and business models.

National Center for Education Statistics data document the federal investment in students at Mennonite institutions. — D. Merrill Ewert and Patricia A. Anderson

Faith-based organizations have historically enjoyed a “religious exemption” from elements of the Civil Rights Act of 1964, enabling them to require that staff share their employers’ faith commitments and lifestyle expectations. They could decline to hire people in same-sex relationships.

Although the recent court case generally affirmed religious freedom, both Solicitor General Donald B. Verrilli Jr. and Chief Justice John Roberts suggested that the tax-exempt status of religious organizations holding to these policies is likely to be challenged in the future. Should those challenges succeed, donors would no longer receive tax deductions for gifts to these institutions, and students could lose access to federal financial aid.

In a Washington Post interview, University of Virginia law professor and religious freedom expert Douglas Laycock predicted that faith-based institutions will eventually lose access to government funding if they continue to “discriminate” against people in same-sex relationships. For higher education, this would include giving up federal contracts, Pell Grants, guaranteed loans and work-study funds.

Part of President Johnson’s Great Society, the Higher Education Act of 1965 created grants and low-interest student loans that made higher education accessible to millions who could otherwise not afford college. A college degree is the single most significant strategy for social mobility.

The enormous investment in federal student aid over the past 50 years reflects a commitment to increasing access to higher education and promoting social equality. Unfortunately, financial aid has not kept pace with rising costs, making college unaffordable for some students. Others have been forced to enroll in lower-cost community colleges or online programs instead of residential, liberal arts institutions.

Up to nearly $20 million

Meanwhile, many small and tuition-dependent colleges are struggling to maintain enrollments — and their own financial viability. An analysis of National Center for Educational Statistics data shows the importance of federal student aid to our Mennonite institutions.

Most undergraduates at Mennonite schools receive at least some federal aid. Pell Grants are available to students with limited resources, while loans are accessible to essentially all.

Goshen (Ind.) College enrolls the lowest percentage of Pell Grant recipients (31 percent). Fresno (Calif.) Pacific University has the highest (56 percent). The percentage of undergraduates with federal loans ranges from 60 percent at Goshen to 81 percent at Bluffton (Ohio) University. At $3.1 million, Hess­ton (Kan.) College receives the few­est federal dollars. FPU receives the most, nearly $20 million.

For 2012-13, the most recent year for which both revenue and student aid data are available, Pell Grants and Stafford loans made up between 18 and 34 percent of the total revenues for our Mennonite institutions. This doesn’t include other federal and state grants or state tuition-assistance programs.

It’s unclear how many of our colleges would remain viable if these went away.

On a collision course

Given the political nature of this issue, it’s doubtful that the tax-exempt status and hiring rights of Christian colleges will be eliminated soon. However, the recent Supreme Court ruling appears to have put religious freedom on a collision course with human rights — with faith-based educational institutions caught in the middle.

After a discernment process that began well before the Supreme Court ruling, both Goshen and Eastern Mennonite University in Harrisonburg, Va., revised their hiring and benefits policies for same-sex couples. This came more than a year after the board of Bethel College in North Newton, Kan., broadened its nondiscrimination policies to include references to sexual orientation and identity.

Other Christian colleges that rely on federal student aid may soon have to reconsider their positions on these issues as well.

Can we afford them all?

These are very tough times for higher education. The U.S. Department of Education recently placed nearly 500 institutions on “heightened cash monitoring” because of their tenuous financial positions.

A number of independent colleges are eliminating programs, cutting faculty, reducing staff, merging, selling themselves or taking initial steps that could lead to closure. Nearly one in five college and university business officers, according to a new study, believes their own institutions are at risk of closing in the foreseeable future.

These developments suggest it’s time for a serious conversation about the future and sustainability of our Mennonite institutions. Can we afford them all? Is it time for a new business model built on collaborative courses and degrees, shared back-office functions, joint faculty, and consolidated organizational structures and administrative leadership? How many resources can we invest in our denominational schools? On which core commitments are we unwilling to compromise, regardless of what that might cost?

These are all important questions that our Mennonite college and university administrators and governing boards should be asking. The Supreme Court may inadvertently have done us an enormous favor by forcing the issue now rather than allowing us to postpone this conversation until later, when it might be too late.

D. Merrill Ewert is president emeritus of Fresno (Calif.) Pacific University and has taught at the University of Maryland, Wheaton (Ill.) College and Cornell University. He served as senior adviser to the Assistant Secretary of Education in Washington, D.C., after retiring from FPU.

Patricia A. Anderson is former provost at FPU, previously served as provost at Azusa Pacific University and has held administrative roles at the University of Michigan, Northwestern University and the U.S. Department of Health and Human Ser­vices.

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  • Darrin Snyder Belousek

    D. Merrill Ewert and Patricia A. Anderson do the Mennonite church community a good service by drawing attention to the substantial dependence of Mennonite colleges and universities on the financial subsidy of the federal government. This government dependence is fairly typical of higher education today in both public and private institutions. Aside from the question of a potential conflict between Christian conscience and government assistance that might arise from the recent Supreme Court ruling on same-sex marriage, the writers rightly question whether, in any case, the current model of private higher education is financially sustainable. One might also add the question whether, for educational institutions in the Anabaptist tradition, such government dependence is ethically desirable. The authors do not, however, point out the obvious problem glaring back at us from the data table they provide: the substantial dependence on student indebtedness. On average, nearly 3 in 4 students at Mennonite colleges and universities need federal loans to fund their education, averaging more than $7,000 per indebted student. If we added in private loans, that proportion and amount could be even greater. The stark reality is that Mennonite colleges and universities, like many small private institutions, are heavily leveraged on the debt loads–and thus financial risks–of their students. Given that tuition costs are rising much faster than inflation, Mennonite institutions can continue functioning on the current model into the foreseeable future only by their students taking on even greater debt loads. And, given that of all the stakeholders in higher education students are, arguably, the least able to bear that financial risk, one might question the fairness of the current model. I think it is time to begin imagining a model of Anabaptist-Christian higher education that is neither dependent on government subsidy nor leveraged on student debt. Are we willing to take that risk?

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