Collegiate Decisions: Lessons from the Perpetual Education Fund

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 ( 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.

Image: Tax CreditsCC BY 2.0


  1. As simple and informative as this article is I am inspired by it. It’s an amazing approach to managing one’s responsibility to seek out, finance and obtain an education. It’s also a testimony to me of the inspiration of President Hinckley. Although I didn’t require a PEF loan (because my work and I paid for my schooling) I still wish I would have gone through that program to self-actualize and learn to ask the right questions. I was one of those lost souls who wasted a lot of time/money on less valuable pursuits.

    1. Thank you, Jim.
      The PEF is only available in a handful of countries, but I really, really wish they would provide the training workshops to all prospective college students worldwide. It really does help, and I think it would be especially helpful in places like the US where both the student loan program and the idea that you figure out what you REALLY want to study after you’ve already started college have just become assumed parts of the college experience. Not many students actually think about what they are getting into. I know I would have avoided a great many pitfalls myself had I sat through the workshops at 18.

  2. Shiloh,

    What’s your opinion on interest charged on the PEF? As far as I understand interest is not really kosher with Zion’s system.


    1. I’m not Shiloh, but I’ll throw my 2 cents in.

      Unfortunately, we have yet to attain Zion and are forced into monetary interactions with a very non-zionistic monetary system that tends toward inflation. The Biblical (and common sense, to the liberty minded) injunction to not engage in usury, was instituted in a time when inflation was virtually nil. If you loaned someone 50 gold pieces, they could give you back 50 gold pieces a year later and, generally speaking, you could still buy the same amount of sheep from year to year with that amount of gold. So, to charge someone 30 pieces of gold to borrow your 50 is, arguably, exploitative. That is not the case in our current monetary world. If I loaned someone $100US a year ago, and they pay me back $100US today, I may only be able to buy 95% of the groceries today with that $100 that I would have been able to buy a year ago with that same $100US. So, I, in effect, come out behind for having lent the money in the modern world if I charge no interest at all. Now, I could decide to lend money, knowing I would come out behind, for any myriad reasons, but I don’t think it’s uncalled for to expect to receive the same value back from someone to whom I loaned money.
      Incidentally, there is no penalty for paying the loan back early, and they are encouraged to do so in the financial workshop, both to save themselves interest payments and to free the funds up again asap so that someone else can use them.

      1. Anne,

        Thank you, your point is very well written and I agree wholly that this is not a Zion society that we live or operate in. Inflation is a factor, but nevertheless a factor produced by Babylon. I am still left wondering what the justification is for mixing Babylonian financial rules with our own. Joseph Smith taught that Zion cannot be built up by the methods of Babylon. I realize that the church is made up of men and for the most part everyone is trying to do the right thing. I am just concerned that as a whole we as the church rationalize accepting and using these Babylonian ideas and instead of drawing us closer to Zion we are actually moving further away.

        1. I suppose we can agree to disagree. I think that if the purpose of the program is to be perpetual, it needs to function in a way to ensure that it continues in the future. But I can also understand your distaste.

          1. The system needs to be prepetual. By not adjusting for inflation, the program loses this very important attribute.

  3. The church uses tithing for this PEF when it needs to so I personally do not believe those interest payments keep it perpetual:

    “Tithing donations are most usually remitted through the local congregational leader, or bishop, and from there to Church headquarters, where they are allocated and disbursed directly to the Church’s many worldwide programs, including its educational, missionary, building, humanitarian and welfare efforts.(”

    Also in Luke 19 Jesus talks about usury is reaping what you don’t sow:

    11 And as they heard these things, he added and spake a parable, because he was nigh to Jerusalem, and because they thought that the kingdom of God should immediately appear.
    12 He said therefore, A certain nobleman went into a far country to receive for himself a kingdom, and to return.
    13 And he called his ten servants, and delivered them ten pounds, and said unto them, Occupy till I come.
    14 But his citizens hated him, and sent a message after him, saying, We will not have this man to reign over us.
    15 And it came to pass, that when he was returned, having received the kingdom, then he commanded these servants to be called unto him, to whom he had given the money, that he might know how much every man had gained by trading.
    16 Then came the first, saying, Lord, thy pound hath gained ten pounds.
    17 And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities.
    18 And the second came, saying, Lord, thy pound hath gained five pounds.
    19 And he said likewise to him, Be thou also over five cities.
    20 And another came, saying, Lord, behold, here is thy pound, which I have kept laid up in a napkin:
    21 For I feared thee, because thou art an austere man: thou takest up that thou layedst not down, and reapest that thou didst not sow.
    22 And he saith unto him, Out of thine own mouth will I judge thee, thou wicked servant. Thou knewest that I was an austere man, taking up that I laid not down, and reaping that I did not sow:
    23 Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?
    24 And he said unto them that stood by, Take from him the pound, and give it to him that hath ten pounds.
    25 (And they said unto him, Lord, he hath ten pounds.)
    26 For I say unto you, That unto every one which hath shall be given; and from him that hath not, even that he hath shall be taken away from him.
    27 But those mine enemies, which would not that I should reign over them, bring hither, and slay them before me.

    In the end I guess I just believe it is wrong that we would rather rationalize using Babylonian principles than actually step out of the world and build Zion. I am sure that most of the people using the PEF are paying tithing and fast offerings. Plus with all the money our buisnesses bring in there is no need to charge interest.

  4. Caleb,

    If you believe we are led by a modern prophet, the manner in which the PEF is set up should not be cause for concern. If you don’t believe we are led by a modern prophet, than your concerns about principles of Zion may be moot anyway. Either way, I do not think that keeping up with inflation can be considered usury.

    Just my take.


    1. Jason,

      I personally am at the point now where I wonder if the president is always a or the prophet. Either way that is another subject. I believe this is the gospel of Jesus Christ and that man has a free agency even the presidents and prophets. All men can make mistakes regardless of title or position. The belief that the prophet can not lead the church astray is false doctrine perpetuated by men who know not the Gospel. Joseph Smith, Brigham Young, and Isaiah to name a few taught that prophets could lead the church astray. All through out the scriptures we are taught never to trust in the arm of flesh. My point is this are we as a church/people at the point in Mormon 8:38:

      “O ye pollutions, ye hypocrites, ye teachers, who sell yourselves for that which will canker, why have ye polluted the holy church of God? Why are ye ashamed to take upon you the name of Christ? Why do ye not think that greater is the value of an endless happiness than that misery which never dies — because of the praise of the world?”

      That we rationalize all these little Babylonian principles such as usury on these school loans and using church money to build the city creek center at the same time that we are blind to what Christ would do? I am sorry but I am a wicked man myself and I cannot see Christ who kicked the money changers off the temple steps charging interest with all the money paid in tithes and buisness revenue being used to house stores that cater to the children of Babylon not the children of Zion.

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