Towards a Lutheran Theology of Tuition and Financial Aid for Christian Schools

Share This Resource

A Biblical Model
for Supporting Association-Model Lutheran Schools
By Dan Krause
President, GraceWorks Ministries

© 2019


“No matter what happens, you should say: There is God’s Word. This is my rock and anchor. On it I rely, and it remains. Where it remains, I, too, remain; where it goes, I, too, go.” (Martin Luther)

For decades, the traditional Lutheran view of the relationship of member churches to sponsoring Pk-12 schools has been to subsidize, often deeply, the tuition costs of congregational members who attend the school.  In many parts of America, it is not uncommon for so-called “member tuition” rates to be a third of what non-members pay.  These discounts irrespective to what these families can afford to pay.

But in fact someone must the pay what it actually costs to educate these precious children.  As we would ask these children to approach all of life according to God’s word, educational leaders of their schools must also evaluate their modus operandi for Christian school funding according to that very same standard, God’s eternal word. 

A Deeper Standard than Appeals to Reason

A truly Biblical standard goes beyond reasonable arguments.  It is certainly instructive to see if subsidized families give a commiserate amount of tax deductible contributions to their local church in lieu of not paying the non-member rate. 

However, whether they do or do not is simply not an adequate basis for a Biblical model of Lutheran school funding, which by definition is grounded on God’s word.  If the standard deduction is high enough that most people will not itemize their church contributions, is that a Biblical reason, grounded in the Word of God, to eliminate member discounts?  (Or for that matter, would it be a Biblically justified argument to eliminate member discounts if the deduction for charitable gifts was eliminated altogether?)

Likewise, we must go beyond business reasoning.  From a business point of view, it seems non-sensical to charge less than it costs to provide a service.  What other services can you think of that do this?  Most would be related to the US government!  So even though it doesn’t make sense (in the long run at least) to charge less than it costs to provide a service, that in itself is not a Biblically justified argument to eliminate member discounts, even in situations where the majority of families are making in excess of $100,000/year in household income.

The same is true of reasonable tuition changes because of demographic changes.  It could be argued that multi-child discounts penalize smaller families, which is most parts of the country, is increasingly the norm.  (This is painfully obvious in Canada, with their family tuition plans, a version of multi-child discounts on steroids.)  Demographics alone is not enough to make a biblically justified decision to eliminate member discounts.

What are the Biblical Standards That Guide Us?

To me, there are four biblical pillars for changing the member discount program of a Lutheran Association School.  We will consider each in turn.

Biblical Pillar #1:  Each According to Their Need

A significant problem with the common association school model of a “membership has its privileges” philosophy is that it is nowhere to be found in the Bible.  Instead, we read Old and New Testament passages such as these:

“They sold property and possessions to give to anyone who had need.” (Acts 4:25)

“The priest will then prepare the second bird as a burnt offering, following all the procedures that have been prescribed.  Through this process the priest will purify you from you since, making you right with the LORD, and you will be forgiven.  If you cannot afford to bring two turtledoves or two pigeons, then he shall bring as his offering for the sin that he has committed a tenth of an ephah of fine four for a sin offering.”  (Leviticus 5:11)

“Then one poor widow came and put in two small copper coins, which amounted to a small fraction of a denarius.  Jesus called His disciples to Him and said, ‘Truly I tell you, this poor widow has put more than all the others into the treasury. For they all contributed out of their surplus, but she out of her poverty has put in all she had to live on.’”  Mark 12:42-44a

Throughout Acts the Apostles emphasized that that everyone – rich and poor alike – was to receive the full benefits of the Christian church.  In Acts 6:1ff, deacons were appointed to ensure that widows would not be neglected in the daily distribution of food.  James, the half-brother of Jesus, is very direct that there is to be no partiality shown based on economic circumstance:

“My brothers, as you hold out your faith in our glorious Lord Jesus Christ, do not show favoritism. Suppose a man comes into your meeting wearing a gold ring and fine clothes, and a poor man in shabby clothes also comes in. If you lavish attention on the man in fine clothes and say, ‘Here is a seat of honor,’ but say to the poor man ‘You must stand,’ or, ‘Sit at my feet'” (James 2:1-3).

In the Old Testament, the sin offering was required of every Jewish believer, but the poor could satisfy this requirement with a little fine flour, not even requiring oil.  In Jesus’ eyes, even the destitute widow was at least worthy – if not more worthy – to receive all that the church had to offer.  Throughout the Old and New Testament, it is clear that no one is to be denied the benefits of the Kingdom of God (the Church) due to limited finance. 

We like to think that a low member discount would encourage the poor to participate in our Lutheran schools.  But in reality, even the member rate is too high for some of our members, and under charging those who can afford to pay the cost to educate their child(ren) leaves us with limited wherewithal to help those most needy.

To be clear, a Biblical tuition plan would say:  If you qualify – objectively and fairly – we will provide up to 100% of the cost to educate your child.  As a member of our Lutheran Church and Lutheran School Association, we take care of our own.   And that is what the church’s association fees cover:  The cost to educate our own children – as needed up to 100% – and the cost to educate non-member children, generally up to no more than 50% of the cost. 

And to those non-members, it is certainly more within the character of the church in Acts (e.g. 4:32) to say:  “The financial aid that allows your child to attend our Lutheran school comes from the generous giving of members at ______ Lutheran Church.” What we typically say instead is: “You must attend one of association churches at least twice a month – and sign in – to receive the member discount.” 

Dear reader, which do you think is the stronger evangelistic strategy?  

Biblical Pillar #2:  Providing Service Regardless of Income

It’s a fair Biblical question:  Whether on purpose or not, is it morally right to target people by income level?  Note that this is not just a question of whether it is morally right to target the rich, what about targeting the poor?  Or is it Biblical to target at all?   And finally, what are the practical implications of the answer to these important questions?

Here we do not have to hypothetically ask what would Jesus do (WWJD), we can ask what Jesus did do in his own ministry.  First, our Savior clearly did have a target.  Consider passages such as these:

“But He answered and said, ‘I was sent only to the lost sheep of the house of Israel.’ But she came and began to bow down before Him, saying, ‘Lord, help me!’ And He answered and said, ‘It is not good to take the children’s bread and throw it to the dogs.’ But she said, ‘Yes, Lord; but even the dogs feed on the crumbs which fall from their masters’ table.'”  (Matthew 15:24-26)

“But Zacchaeus stood up and said to the Lord, ‘Look, Lord, half of my possessions I give to the poor, and if I have cheated anyone, I will repay it fourfold.’ Jesus said to him, ‘Today salvation has come to this house, because this man too is a son of Abraham. For the Son of Man came to seek and to save the lost.’”  (Luke 19:8,9)

Clearly Jesus had a target:  The lost sheep of Israel.  Zacchaeus was a rich lost sheep of the house of Israel, but Jesus also helped destitute lepers (Matt 11:5) and the Jewish man at the pool of Bethsaida (John 5).  And in feeding the multitude (Matt. 14) he ministered to everyone in-between economically.  In short, if we were to follow the example of Jesus, we would have a ministry target, but we would not target economically.  As a Christian school, it is proper to have a ministry target, but that target would not be defined by income level. 

That is to say, to the best of our ability, following the example of our Lord, our tuition and financial aid model would allow for the widest diversity of families by income level.  Practically speaking, there are four basic ways tuition and financial aid can be handled, represented by the table below.  

In GraceWorks’ experience with hundreds of Christian schools, along with over 650 school surveys, is that the greatest diversity of income comes in schools that charge a reasonable (full cost or more) tuition with ample financial aid (Quadrant A).  This attracts both high income households (who bring a higher initial appreciation of the value of the school) and lower income families (who realize that a great deal of financial aid is available) and everyone in between. 

In contrast, the typical Lutheran Association School model is represented by Quadrant D – lower tuition (member rates) and limited financial aid (can’t afford to provide it.)  This discourages lower income families, who find that member rates are still too high, as well as higher income parents, who rightly wonder if the value of the program is high – and increasingly, whether the school itself has long-term financial viability.

(Clockwise, the 4 Quadrants)

Quadrant A:  High Tuition / Significant Financial Aid – Attracts widest economic diversity
Quadrant B:  High Tuition / Little Financial Aid – Attracts largely higher income
Quadrant C:  Low Tuition / Significant Financial Aid – Inner City model, few higher income
Quadrant D:  Low Tuition / Little Financial Aid – Attracts largely middle class, fewer high or low

An association model that charges adequate (full cost or more) tuition with ample financial aid (typically six figures) has the best chance of attracting economic diversity.  This idea hearkens back to the school model that was prevalent from about 1890 to 1960, when rich and poor alike attended the same schools.  Social historians agree that this was very good for our country.   And it certainly can be now, in your school, for your children.

Biblical Pillar #3: Not Allowing the Poorer to Subsidize the Richer

When we offer a service for less than it costs to provide that service, someone else must pay for it.  A significant problem, both practically and Biblically, is who, exactly, makes up this difference.  In reality, the answer often is – congregational members and teachers.  Let’s take each in turn.     

In contrast to the families that are subsized, Congregational members are often older, lower in household income, and not infrequently, on fixed incomes.  The socio-economic characteristics of givers to a Lutheran association congregation is a knowable question – as are the socio-economic characteristics of the members subsidized at the association school.  

With a little research, it is a knowable question whether the poorer are subsidizing the richer.  If that is the case – and frequently it is – it begs the question:  How can God bless us in this?Teachers represent another blessing problem. Often teachers struggle to make a livable wage – in contrast to parents who are making incomes that are 3-4 times higher.  (Again, the statistics are knowable.)  A practical consequence of subsidizing richer parents through poorer teachers is that many male teachers – potential healthy male role models for our students – have no choice but to leave teaching in order to adequately provide for their families.

Besides the fact that most of think it is morally wrong for those poorer to subsidize those richer, what is the Biblical case against it?

One of the clearer examples in the old Testament is God’s specific warnings to the people of Israel, who against God’s will, wanted a king to rule over them:

“So Samuel told all the words of the Lord to the people who were asking for a king from him. He said, ‘These will be the ways of the king who will reign over you: he will take your sons and appoint them to his chariots and to be his horsemen and to run before his chariots.  And he will appoint for himself commanders of thousands and commanders of fifties, and some to plow his ground and to reap his harvest, and to make his implements of war and the equipment of his chariots.  He will take your daughters to be perfumers and cooks and bakers.  He will take the best of your fields and vineyards and olive orchards and give them to his servants.  He will take the tenth of your grain and of your vineyards and give it to his officers and to his servants.  He will take your male servants and female servants and the best of your young men[a] and your donkeys, and put them to his work.  He will take the tenth of your flocks, and you shall be his slaves.  And in that day you will cry out because of your king, whom you have chosen for yourselves, but the Lord will not answer you in that day.'” (1 Samuel 8:10-18). 

A notable example of exactly what Samuel predicted was Jeroboam II of the Northern Kingdom (2 Kings 14). Amos conveyed God’s harsh judgement on Jeroboam II throughout the book of Amos:

“You levy a straw tax on the poor
and impose a tax on their grain.
Therefore, though you have built stone mansions,
you will not live in them;
though you have planted lush vineyards,
you will not drink their wine.
For I know how many are your offenses
and how great your sins.”  (Amos 5:11-12)

About three decades after this prophecy, Assyria utterly wiped out the Northern Kingdom in 722BC – the so-called “ten lost tribes.”

We have Jesus’s admonitions as well:

“Then Jesus said to his host, ‘When you give a luncheon or dinner, do not invite your friends, your brothers or sisters, your relatives, or your rich neighbors; if you do, they may invite you back, and so you will be repaid. But when you give a banquet, invite the poor, the crippled, the lame, the blind, and you will be blessed. Although they cannot repay you, you will be repaid at the resurrection of the righteous.’” (Luke 14:12-14)

Perhaps Solomon sums up this important issue the best:
“Whoever oppresses the poor to increase his own wealth, or gives to the rich, will only come to poverty.” (Proverbs 22:16). 

Is it possible that our Lutheran schools have come to poverty over this very issue?

Biblical Pillar #4: Joyful Giving

It is clear throughout scripture that our giving is to be done cheerfully and joyfully.  For example:

“They begged us again and again for the privilege of sharing in the gift for the believers in Jerusalem.” 2 Cor 8:4

“Then King David said to the whole assembly: ‘My son Solomon, the one whom God has chosen, is young and inexperienced. The task is great, because this palatial structure is not for man but for the Lord God. With all my resources I have provided for the temple of my God—gold for the gold work, silver for the silver, bronze for the bronze, iron for the iron and wood for the wood, as well as onyx for the settings, turquoise, stones of various colors, and all kinds of fine stone and marble—all of these in large quantities. Besides, in my devotion to the temple of my God I now give my personal treasures of gold and silver for the temple of my God, over and above everything I have provided for this holy temple:  three thousand talents of gold (gold of Ophir) and seven thousand talents of refined silver, for the overlaying of the walls of the buildings, for the gold work and the silver work, and for all the work to be done by the craftsmen. Now, who is willing to consecrate themselves to the Lord today?’  Then the leaders of families, the officers of the tribes of Israel, the commanders of thousands and commanders of hundreds, and the officials in charge of the king’s work gave willingly.”  1 Chronicles 29:1-6

If we were to biblically critique the issue of automatic church subsidies and automatic member discounts, we have to ask if the current system facilitates joyful giving.  Too often we hear that that we are compelled to give to our association school, which simply won’t make it without our congregational support.  Yet Paul explicitly tells us NOT to do this:

“Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.” 2 Cor. 9:7

In fact, thinking through the previous problem of the poorer subsidizing the richer, it is hard to see why anyone should joyfully support this unbiblical situation.  Yet we ask congregational members to do this all the time – as if they are poor Christians if they do not step up and do their duty.

The remedy here is simple – congregational support of association schools goes towards needs-based financial aid for families who truly, objectively, verifiably need it.  We ask families who can afford to pay the cost to educate their child to pay it.   In a full-cost world, it is obvious that we will need six figure amounts of financial aid to help lower income families – who students will be much more likely to graduate college, stay in church, and live as pillars of society.  The case for supporting needs-based financial aid is a very strong cause concept.


Considering the four truly Biblical standards of (1) Each according to their need, (2) Service regardless of income, (3) Not Allowing the Poorer to Subsidize the Richer, and (4) Joyful Giving, practical guidelines tuition/ financial aid guidelines for association model schools are as follows:

(1) Automatic discounts are discontinued; needs-based financial aid takes their place
(2) Tuition rates move to the full cost to educate a child
(3) The greatest needs-based financial aid (up to 100% if qualified) goes to association church members
(4) Congregational support of association schools moves to needs-based financial aid
(5) This more Biblical approach is thoroughly presented throughout the congregations and with financial aid recipients, to improve both the evangelistic impact of the school, and the stewardship results of the church.

It is my conclusion that spiritual dynamics are at play however we do financial aid. Some bless us, others curse us. In deciding what is best, I cannot escape Paul’s exhortation:

“Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is–his good, pleasing and perfect will.”  (Romans 12:2)

And to understand God’s will, we must end where we started – with God’s unchanging Word. The Bible is our foundation, whether in teaching students or conducting our financial affairs. 

Table of Contents

Scroll to Top