The Perpetual Education Fund [PEF] was established by the church in 2001 to help church members in parts of the world where funding for education can be difficult to obtain. The purpose of the program (https://www.lds.org/general-conference/2001/04/the-perpetual-education-fund?lang=eng) in the words of then President Gordon B. Hinckley was to allow “young [people to] rise out of the poverty they and generations before them have known… [to] better provide for their families… [and to] serve in the Church and grow in leadership and responsibility.” While the program is available only in areas of the world that experience extreme poverty, many students and families in prosperous countries have found that the economic downturn coupled with the rising costs of higher education, has them rethinking whether college is even necessary. For this reason, I’d like to pass on what I learned in the process of mentoring a student through the PEF Loan application process, as the pre-application workshops is full of valuable information for all potential college students.
First, potential PEF recipients establish what their goals for employment are. Often, potential college students skip this step, thinking they will figure it out as they go. However, this can prove to be a very expensive waste of time. PEF candidates do a self-assessment by listing their strengths and weaknesses, their feelings about work in general, and lessons learned through prior work experience and church service. Then, they are asked to research a career that interests them and that would build off the skills and attributes they already have. They then seek out people who are working in this field and ask questions that many potential students don’t think to ask. They inquire about the current demand, salary levels, and opportunities for promotion, and how they will find jobs in that field after graduation. They are asked to research whether there are schools in their area that will provide them the training they need, which would allow them to cut their costs by living at home. This notion may not be popular in some countries where college is sold as an “experience” rather than as a means to forward one’s education, but at some colleges, living at home can halve the overall costs of attendance.
Next, candidates research exactly what training, certifications, and degree is necessary for work in the field in which they are interested, including whether the student could forgo formal education all together in favor of an internship or on the job training. I’ll repeat that point: candidates are asked to explore whether they need college at all. The purpose of the PEF program is not to get an education for education’s sake. We should be seeking out learning at all stages of life, whether we pay someone to teach us or pick up a book on our own. Whether we need education generally is not the point. The stated purpose of the PEF program is to help people obtain the skills they need to improve their income so they can be self-sufficient and rise out of poverty. Taking out loans to get an education for education’s sake does not help one rise out of poverty. It deepens debt in the face of poverty. In wealthy countries, students are leaving college with tens, if not hundreds, of thousands of dollars of debt that they then have to find a way to pay off on salaries that may not come close to allowing them to do so. Students who do their due diligence in this area before starting school, have the chance to opt for a less expensive college, an intern- or apprenticeship, or a degree that would have create better earning potential, allowing them to leave school in a state of financial freedom, rather than bondage.
Additionally, students who receive PEF loans are required to make payments against their loans as they are attending school, so they are asked to assess their current income status to make sure that they can afford to live while they attend school. The payments they are asked to make while in school are minimal, but they provide immediate accountability for the student. They aren’t able to ignore their debt until sometime in the future as students who receive tax-payer funded student loans in other countries can. They are reminded monthly of the commitment they have made to their education and the financial responsibility that comes along with it. In wealthier nations, there is often an attitude among students and their parents that the student shouldn’t have to work while they are in college. The thought is that they should devote themselves to learning and to the college “experience.” However, working while attending school teaches students valuable organization and time management skills, not to mention the fact that some of the college experience is best avoided.
After all this information is accumulated, and, indeed, after every major decision made in the process, potential loan participants are asked to take their decisions to the Lord in prayer and listen to the promptings of the Spirit in how to proceeded. They then move forward as guided. If they need to adjust their plans or do more research, they do. If the student can get further experience and improve their prospects through on-the-job training or experience, then they are encouraged to move in that direction immediately.
For those who require formal higher education, students move on to the next workshop where they evaluate their school options. They are required to visit the schools and interview a representative about the school’s merits in the field they have chosen, the course requirements and timeline, the complete cost of the program including additional fees and texts, financial aid options, graduation and job placement rates, and whether the student meets the qualifications required to gain admission. They also explore options for additional sources of financial aid and grants that would help lower or eliminate the need for a loan. Many students do not realize that most financial aid offices keep a file of scholarships and grants from secondary sources, some of which go un-awarded from year to year, because no one bothers to apply for them. It certainly doesn’t hurt to ask, and 20 hours of application time for a handful of grants may save the student years of their salary in loan repayments. After researching all their options, the student then decides which school would best meet their needs, considering the actual price they’d have to pay against their expected salary at graduation.
A student who will need to pay out of pocket for their education, moves on to the next workshop where they work out a precise budget for their first year of schooling. They write out a specific accounting of what they spend in a month verses what they bring in and compare that to what their actual costs for schooling will be, including all fees and supplies and any discounts and scholarships they will receive, to establish whether they will need a loan at all, or if they can fund their education out of pocket. There is no encouragement to apply for the maximum amount possible and use the excess to live on, as sometimes happens in tax-payer funded loan programs. The student places themselves into only as much debt as is absolutely necessary. Those who find they can afford the school they chose on their own income don’t apply for the loans at all.
One crucial aspect of this process that I’d like to stress is that all of this work and research is done by the student. A student who is not invested enough in his own education to do the work required for establishing goals, choose the best school, and seek funding may not yet be independent enough to get the most out of their education opportunity. It is not uncommon for smart students to “wash out” of college, because they lack persistence or are intimidated by the thought of approaching people for help. The process of getting a PEF loan is difficult for a good reason; it weeds out students who are not yet ready to face the work required by additional schooling. Likewise, all parents need to walk the line between encouraging their potential students without taking over the process for them.
Finally, one should note that the vast majority of applicants for the PEF loan receive loans for only 2 years. A 2-year degree or training program is enough for most to find work that pays better than what they previously earned. With that extra bit of financial self-sufficiency, most students can shift to working full-time in their field while finishing a 4-year degree part-time without the need for as many, or any, additional loans. This aspect of the PEF program should not be over-looked by students in wealthier nations, as most 4-year degrees can be achieved in this way.
The peace of mind brought by financial freedom is completely ignored by those trying to sell you on their schools. Never trust a salesman to tell you the best way to buy their product: they don’t care how you pay, just that you do. It is the student’s responsibility to be an informed consumer of higher education, whether it’s needed at all, and the financial impact it could have for decades to come if it is not planned for properly.