R. C. Sproul accuses those who don’t believe the church is the New Israel, i. e., dispensationalists, of believing in two ways of salvation:
“Whether it is said that the church is an afterthought or that the church replaces Israel, both views implicitly affirm that there are two different ways of salvation, one for the Jews and one for the Gentiles. However, the Bible teaches that there is but one people of God and only one way of salvation” (The People of God). Sproul not only disagrees with dispensationalists or those who, in his opinion, believe the church is an afterthought, but he disagrees with other nondispensationalists, or those who believe in replacement theology, which includes many covenant theologians. Both of these groups, according to Sproul, teach two ways of salvation, i.e., salvation by grace and salvation by works. In other words, if you disagree with Sproul, you teach works for salvation. That is a serious accusation. That is an accusation of heresy.
Some Reasons Dispensationalists are Charged with Teaching Two Ways of Salvation
1. This accusation is made because we call the present dispensation the dispensation of grace.
This is Daniel Fuller’s argument: “It is impossible to think of varying degrees of grace, for God either is or is not gracious” (Daniel Fuller. The Hermeneutics of Dispensationalism, 164). But even in a single dispensation, God “gives more grace” (James 4:6). Jesus also indicated that grace would be more prominent after the law in John 1:17. Peter says there was a grace that the Old Testament believer never experienced in 1 Peter 1:10.
2. Another reason for this accusation is the misstatements that have been made by dispensationalists.
Scofield made such a misstatement in his study Bible: “As a dispensation, grace begins with the death and resurrection of Christ (Rom. 3:24-26; 4:24-25). The point of testing is no longer legal obedience as the condition of salvation, but acceptance or rejection of Christ, with good works as a fruit of salvation” (page 1115n. 2).
Nondispensationalists, however, have also made misstatements: “The Law is a declaration of the will of God for man’s salvation” (Oswald T. Allis, Prophecy and the Church, page 39). Louis Berkhof also made the same ungraded statement: “Grace offers escape from the law only as a condition of salvation,” and “From the law both as a means of obtaining eternal life and as a condemning power believers are set free in Christ” (Systematic Theology, pages 291, 614).
The New Scofield Bible wrote a clarifying statement: “Under the former dispensation, law was shown to be powerless to secure righteousness and life for a sinful race (Gal. 3:21-22). Prior to the cross man’s salvation was through faith (Gen. 15:6; Rom. 4:4), being grounded on Christ’s atoning sacrifice, viewed anticipatively by God; now it is clearly revealed that salvation and righteousness are received by faith in the crucified and resurrected Savior” (page 1124n. 2).
Even the original Scofield Bible was clear in other notes that there is only one way of salvation: “Law neither justifies a sinner nor sanctifies a believer (1245); It is exceedingly important to observe that the law is not proposed as a means of life” (93).
3. Another reason for the accusation is the statements that God’s grace ended when the Law began.
Some dispensationalists have implied this: “Israel deliberately forsook their position under grace, which had been their relation to God until that day, and placed themselves under the law” (Chafer, Systematic Theology, 4:262). Paul’s argument is that the Law did not abrogate grace (Galatians 3:17-19).
Again, covenant theologians have made similar statements: “The Sinaitic covenant is an interlude, covering a period in which the real character of the covenant of grace, that is, its free and gracious character, is somewhat eclipsed by all kinds of external ceremonies and forms, which, in connection with the theocratic life of Israel, placed the demands of the law prominently in the foreground” (Berkhof, Systematic Theology, page 296-297).
The tension exists because Scriptures teach there is a contrast between the law and grace and yet salvation has always been by grace alone (John 1:17; Romans 6:14; Galatians 3:23).
There was Grace Under the Law
Was there grace under the Law? The answer is yes. Just read Exodus 22:26-27, where in the midst of giving the 614 laws, God states that He does so because “He is gracious.” Here are a few examples of grace under the Law provided by Charles Ryrie:
1. Grace was displayed by God’s electing of Israel (Deut 7:14-16)
2. The giving of the New Covenant (Jer. 31:32)
3. The great covenant with David, (Psalm 89:33-34) which was said to be God’s “lovingkindness.”
The Teaching of Covenant Theology on Salvation
The teaching of Covenant theology on salvation is represented by Charles Hodge: “It has always had the same promise, the same Redeemer, and the same condition of membership, namely, faith in the Son of God as the Saviour of the world” (Systematic Theology, 2:372-73).
John MacArthur, who is very reformed in his soteriology, does not agree with the position of this quote, when he said that Old Testament believers “received the gift of God’s salvation without seeing its full accomplishment (cf. Heb. 11:39-40), without seeing Jesus Christ or having a relationship with Him. Though the prophets wrote of Messiah, they never fully comprehended all that was involved in Christ’s life, death, and resurrection” (The MacArthur New Testament Commentary, 1 Peter, page 52).
John 8:56 is usually quoted to prove Hodges’ statement: “Abraham rejoiced to see my day: and he saw it, and was glad.”
Abraham rejoiced to see My day, that is, the messianic salvation which God promised (“all peoples on earth will be blessed through you”; Gen. 12:3). Abraham by faith was granted a son Isaac, through whom the Seed (Christ) would come. How much of the messianic times God revealed to His friend Abraham is unknown. But it is clear that he knew of the coming salvation and he rejoiced in knowing about it and expecting it.
But what did Abraham actually do to get justified according to the OT? In Gen 15:6, Abraham believed God and it was imputed to him for righteousness. What did Abraham believe? Did Abraham believe in the death, burial, and resurrection of Christ? No!. In Gen 15:1-6, he believed the revelation of God he then was exposed to, which was, that God would multiply his seed.
The Teaching of Dispensationalism on Salvation
Dispensationalists believe, according to Charles Ryrie, that “the basis of salvation in every age is the death of Christ; the requirement for salvation in every age is faith; the object of faith in every age is God; the content of faith changes in the various dispensations” (Dispensationalism, page 134).
In Acts 17:30, “Paul summarized the Old Testament understanding of salvation and called the period, ‘the times of ignorance which God overlooked.’ That does not imply a clear comprehension of the Christological content of their faith. Paul again summarized the situation concerning salvation in the Old Testament as ‘remission of sins that are past through the forbearance of God’” (Romans 3:25).
 John F. Walvoord, Roy B. Zuck and Dallas Theological Seminary, The Bible Knowledge Commentary: An Exposition of the Scriptures (Wheaton, IL: Victor Books, 1985), Jn 8:56.