Here in the Mennonite Voluntary Service offices, we spend a lot of time thinking about what keeps more young adults from applying to our program. Unsurprisingly, student loans are consistently at the top of the list. Look, we even just posted an article talking about ways to deal with this barrier while in MVS:
Balancing student loan debt and service
To further address this barrier, MVS has created a student loan scholarship fund, and has been awarding scholarships to MVS participants for the past two years. In this post, we would like to give you a look into how this process works and how we decided to distribute the funds to our MVSers.
In the 2014–2015 MVS year, a grant was received from the Fidelia E. Plett Foundation to kick off our self-funded scholarships. With some leftover resources from another MVS project added to the pot, there was $7,500 given out to 13 MVSers.
We kicked it up a notch for the 2015–2016 year with another grant, a new line item in the MVS operating budget, and some extremely generous giving from the MVS unit surpluses.
Saving some for future years, it was decided that $25,000–$30,000 could be split between the 23 applicants. First year MVSers received a $500 base award. For year two, it doubled to $1,000. The remaining balance was then split based on the amount of debt held by each applicant.
If you're the type of person who likes reading about formulas, here's how we decided to divide the extra funds: We started by totaling the amount of debt held by all of the MVSers, and finding what percentage of the total each MVSer held. Then we multiplied the percentage by the remaining funds that were left after we had distributed all of the base awards. We ended up with this:
MVS scholarship = base award + ([individual debt total debt] * remaining funds).
So if the total debt owed by MVSers is $450,000, the remaining funds are $16,000, and you have a first-year MVSer who owes $35,000, this will be the scholarship amount: $500 + ([$35,000/$450,000] * $16,000) = $1,745.
If the MVSer only owes $8,000, it plays out like this: $500 + ([$8,000/$450,000] * $16,000) = $785.
In the end, $29,900 was designated for 2015-2016 MVS scholarships, with an average award ranging from $1,200 for first-year MVSers to $1,500 for second-year.
(The dots above the line represent second-year MVSers, who receive a larger base award.)
These awards are being deposited into accounts as the MVS year comes to a close, as one of the requirements for receiving an award is successfully completing the MVS term. A successful year is considered finishing at least 50 weeks, or with the approval of the unit's local leadership for other circumstances.
The only additional scholarship requirement is submitting an application, which includes showing the amount of debt the MVSer holds.
We anticipate being able to offer similar scholarship awards for the 2016-2017 MVS year, although, of course, there are many factors such as fluctuations with incoming funds and the number of MVSers who apply for the scholarship. The MVS operating budget for this project is being more than tripled this year to provide some additional, consistent funding as well.
Our goal for this scholarship is to help pay off any interest that accumulates on loans during the year, and to hopefully provide some cushion for MVSers transitioning back into making monthly loan payments following their MVS term.
As always, if you need help figuring out what to do with your loans while in service, contact MVS staff. We can provide you with resources to help you think about your options.