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When Kim Woody visited the hilly, tree-covered campus of Bryan College for the first time in March 2005, she knew she’d found the place she wanted to spend the next four years. The small school in Dayton, Tenn., about an hour east of Chattanooga, offered the Christian education she wanted, close to home. But it didn’t come cheap.

During that first visit, Woody and her mom sat down with the financial aid director to find out how much her degree would cost and how she could pay for it. He handed them a piece of paper that detailed tuition, room and board, and other fees, about $20,000 per year. That’s a lot of money, Woody remembers her mom telling the director. Then she asked him what options they had, other than taking out loans, to pay for it.

“He just sort of shrugged and said, good luck with that,” Woody recalled eight years later. “He didn’t really offer any help or anything.”

Woody had several small scholarships that gave her about $6,000 per year, leaving her with a $14,000 annual bill. Her parents offered to pay for half, but for the rest, Woody felt she had little choice but to take out federally subsidized loans.

At the time, it seemed like an investment, and very few people she met on campus were getting an education loan-free. Everyone looked at it as a cost of doing business, or at least getting qualified to do business. She and her classmates had so much optimism about what they would accomplish in the world, she said. But just after the start of their senior year, the economy collapsed, dragging down their optimism with it. By the time they walked across the stage in May 2009, they understood they were entering a changed world where getting by would be a lot harder.

Six months after they picked up their diplomas, Woody and her fellow borrowers received their first loan payment note from Uncle Sam. Woody had a teaching job at a small Christian high school in Memphis. She only earned $21,000 a year. By the time she made her student loan payment and her new car payment, she had little left over. Like many of her former classmates, she moved back in with her parents to make ends meet.

Woody never missed a payment, but others did. By the end of 2010, 23 of her fellow Bryan graduates—6.5 percent of those who took out subsidized loans—had stopped making payments for an entire year, ending up in default.

Among Christian colleges, Bryan had one of the worst default rates in 2010, higher than the 5.2 percent national average for private schools. Despite their emphasis on financial responsibility as an extension of a Christ-like character, many Christian colleges struggle as much as their secular counterparts to make sure students pay back what they owe.

Of 18 Christian colleges WORLD reviewed, three had default rates higher than the private school average in 2010—Union University in Jackson, Tenn., Palm Beach Atlantic University in West Palm Beach, Fla., and Bryan. Only three had default rates below 1 percent—Bob Jones University in Greenville, S.C., Cedarville University in Cedarville, Ohio, and Gordon College in Wenham, Mass.

David Haggard, Bryan’s current director of financial aid, blames the school’s default rate on the economy. The tough times hit the students in Bryan’s adult degree completion programs especially hard, he said. As the economy improves and graduates have an easier time finding jobs, borrowers will feel more confident in repaying what they owe. He also hopes the school’s new financial education efforts will help more borrowers realize they have no excuse for going into default. The government offers income-based repayment plans, which could temporarily wipe out the monthly payment for borrowers who don’t have jobs. Borrowers also can apply for forbearance or deferment, depending on their circumstances.

The school’s biggest challenge is getting the information to the students, Haggard said. Woody doesn’t remember Bryan offering any kind of financial seminars during her time there. But today, the school offers one-on-one financial counseling with incoming students and group sessions for graduates. Administrators get lists of students who miss payments, and a financial aid counselor calls each one to see what the school can do to help.

Palm Beach Atlantic University (PBA) adopted similar measures after watching its default rate jump to 8.4 percent in 2009, up from 5.9 percent the year before. In 2010, the rate dropped to 6 percent—56 of the 927 students who took out federal loans defaulted. The school now requires all graduates to take an online financial literacy course. Administrators also offer in-person exit counseling. And they’ve stopped giving students a full loan package when they enroll. Instead, financial aid counselors talk to students about how much they really need to borrow and encourage them to take out only what they must to pay for school.

Todd Martin, PBA’s financial aid director, agrees with Haggard about the role the economy plays in pushing graduates toward default. But he also thinks some students are just more likely to default, no matter what the school does. When schools are more selective about the students they accept, focusing on higher test scores and grade point averages, they tend to have fewer students taking out loans, he said. Students with lower scores and grades coming into college typically have higher financial needs and borrow more.

PBA wants a mixture of both types of students, but the school is offering more scholarships now in hopes of attracting higher-achieving students. As the campus demographic changes, so should the default rate, Martin said: “We want all students here, but we want to make sure we have a slice of students that are highly motivated leaders on campus because they bring an influence to the whole student body.”

Bob Jones University (BJU) saw the biggest increase in the number of students taking out federal loans—from 1.6 percent in 2008 to 11 percent in 2010. But only 3 students—0.6 percent of borrowers—defaulted that year. Like Bryan and PBA, BJU has a default prevention plan that requires financial counseling and includes calls to former students who miss payments. The difference between BJU and other schools is its students, Director of Financial Aid Kevin Delp said.

Slightly less than 40 percent of BJU students take out loans, both federal and private, but the majority aren’t wealthy. They just work hard to earn money to help pay for their schooling, Delp said. But work ethic and responsibility are hard to quantify, and other factors likely play a role.

Four of BJU’s top degree fields are in high demand and offer better starting salaries than the average liberal arts degree—nursing, accounting, criminal justice, and engineering. From a practical standpoint, graduates with those degrees have a better chance of finding a job and earning enough to pay back their loans, Delp admits.

Caleb Helms, an accounting major, had a job even before he graduated from Union University in 2009. He described his degree as almost recession-proof because companies need accountants, whether they’re making money or not. But Helms, 25, didn’t have to worry about paying back loans. When he started classes at Union in 2005, he decided he wouldn’t borrow anything, if he could help it. Knowing he would have a fixed income and a lot of steady expenses when he graduated, Helms viewed college as a time to work as hard as he could to prepare for the rest of his life: “As much as possible, I wanted to get ahead of the game and stay out of debt.”

Helms worked during high school to save up for college and held down two jobs during most of his time at Union. A scholarship covered almost half the $20,000 annual cost. His grandfather chipped in about $5,000, and Helms paid for the rest. He doesn’t remember talking to many of his friends about their debt, although most of the people he knew who had loans intended to go into ministry or some other field that didn’t pay very much. Many of them went on to graduate school after getting their bachelor’s degrees.

When students take out loans, they think they’re postponing the bill for their education for a time when they can afford it, Helms said. But they don’t realize they’ll end up paying much more over time for the four years during which they actually spend the money: “Not everyone who defaults is financially illiterate but it definitely plays into it,” Helms said.

Both Haggard, at Bryan, and Martin, at PBA, said students don’t think enough as freshmen about how they will pay off their loans once they graduate. Woody admits she didn’t. All she thought about was getting an education. But her history major and biblical studies minor turned out to be less valuable than she expected.

“I thought I was making an investment in my education,” she said. “That justified taking out loans, but then I got out and realized I might have to start flipping burgers just to pay for this terrible decision I made to borrow money. It seemed like a terrible choice.”

Financial aid counselors believe their schools’ default rates will go down in 2011, data the government will release later this year. Students who entered college after Woody and her classmates had more time to prepare for a dismal job market. They also had more warnings about how difficult life would be if they left school with heavy debt loads. And they’ve had more attention from counselors attuned to the dangers of excessive borrowing.

But that might not be enough to keep students from doing whatever it takes to get the education they want. Even Woody’s regrets over her undergraduate loans didn’t stop her from taking out more loans for graduate school last year. She has about $14,000 in undergraduate loans left—roughly half the total—and expects to add about $30,000 to that when she graduates from Vancouver’s Regent College in 2015 with a Master of Arts in Theological Studies.