Refinancing Programs Offer Clergy a Lifeline to Debt Relief and Financial Stability
Like many people, clergy face a significant challenge when it comes to financial well-being: debt. Traditional banking and debt relief programs are rarely designed with clergy’s unique financial situations in mind, such as student debt, clergy compensation and taxes. That’s why for the last six years, Wespath has invested in organizations like the Interfaith Federal Credit Union and Florida Foundation’s Fresh Start Program to help clergy tackle their debt in a sustainable way.
Some programs help clergy by raising money or issuing grants that allow clergy to pay down consumer or student debt. However, these types of debt relief are considered taxable income, which can be costly for clergy, and these funds are limited to whatever is able to be raised. Wespath and its partner organizations realized that a better—and far more sustainable—option was to give clergy the opportunity to refinance their debt at significantly reduced interest rates. In some cases, the original interest rate they were paying was as high as 27%, or with some predatory lenders even up to 200%. By refinancing, clergy can access interest rates around 6% or lower.
Refinanced debt offers huge benefits for clergy—most immediately, it allows clergy to save money on their monthly debt payments—in some cases, up to $800. Wayne Young, director of Strategic Partnerships & Business Development at the Interfaith Federal Credit Union, said this is one of the most significant impacts of refinancing: “One of the great parts about helping clergy move from unsecured debt at a higher interest rate, like credit card debt, to a fixed rate, low interest debt, is that they can see the light at the end of the tunnel.”
Refinancing has other benefits: it makes clergy debt more manageable in the long term, helps improve credit scores with regular payments, and avoids a tax liability. Many of the refinancing options also include financial counseling with a firm like EY Financial Planning Services that helps clergy become more financially knowledgeable, while seeking to avoid similar future situations.
There’s another indirect benefit of this refinancing approach: as clergy begin to repay their debt to the institution or program offering the refinancing, that money goes back into the program and can be used to offer loans to other clergy, creating a more long-term, sustainable solution for everyone involved.
Wespath sees its financial investment in these programs as a way to care for those who serve:
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“For clergy facing debt challenges, it can seem overwhelming,” shared Dale Jones, Wespath’s managing director, Church Relations. “Wespath’s past financial support of the programs that our partners administer has shown that we believe there is a sustainable way forward to help clergy in these situations.” |
Debt’s impact can be profound, causing stress, isolation and shame. By addressing clergy’s unique financial challenges, these programs offer immediate relief from the burden of high-interest debt, a path to financial stability, and ultimately promote long-term overall well-being, ensuring clergy can focus on their vital roles in serving others.
