- In the midst of a pressing issue concerning college affordability, numerous educational institutions are taking proactive steps to alleviate the burden of student debt.
- Currently, around twenty-four colleges and universities have adopted “no-loan” policies, committing to fulfilling 100% of a student’s financial needs through grants instead of loans, as reported by The Princeton Review.
With college education increasingly becoming a privilege limited to a select few due to financial constraints, recent studies indicate a concerning trend.
Nevertheless, some colleges are implementing innovative approaches to attract students who are wary of the escalating costs.
Approximately twenty-four institutions have embraced “no-loan” initiatives, effectively eradicating student loans from their financial aid packages.
Menaka Hampole, an assistant professor of finance at Yale School of Management, remarked on the growing prevalence of no-loan policies, stating, “They are giving them out like candy now.”
Among the schools recognized in The Princeton Review’s “The Best 389 Colleges,” twenty-three assure meeting the full financial need of their undergraduates without resorting to loans.
In the aftermath of the Covid-19 pandemic, an increasing number of institutions are introducing no-loan policies, largely influenced by Princeton University’s substantial endowment that enabled such actions.
Colin Hatton, a senior consultant at NEPC’s endowments and foundations team, noted the ongoing financial challenges faced by colleges nationwide, primarily stemming from declining student enrollment and tuition revenue.
‘No loan doesn’t mean free’
Despite the absence of loans, students may still be responsible for the expected family contribution, along with additional expenses such as books and fees. Some schools may also mandate a work-study program depending on the student’s circumstances.
Even with a no-loan policy in place, students and families are not restricted from borrowing money to supplement their financial responsibilities.
Robert Franek, the editor in chief of The Princeton Review, emphasized, “No loan doesn’t mean free.”
Institutions with no-loan policies
Nicole Hurd, the president of Lafayette College in Easton, Pennsylvania, emphasized the importance of maintaining accessibility to higher education by ensuring that families with household incomes up to $200,000 have their financial needs met through grants and work-study programs, without the necessity of loans.
Colby College in Waterville, Maine, has upheld a no-loan policy since 2008, providing students like Terra Gallo and Jackie Hardwick with essential financial support and opportunities to pursue their academic goals without accumulating significant debt burdens.
Randi Maloney, Colby’s dean of admissions and financial aid, underscored the impactful message of the no-loan policy, particularly during a time when families are grappling with the financial implications of higher education costs.
Addressing the student debt concern
Robert Franek highlighted the significance of these initiatives in alleviating the financial burden on students and parents, acknowledging their apprehensions about accumulating excessive debt.
By demonstrating a commitment to students’ financial well-being, colleges can potentially attract a larger pool of applicants, thereby enhancing their enrollment rates and overall institutional reputation.
In conclusion, the implementation of no-loan policies not only benefits students by mitigating financial strain but also presents colleges with opportunities to expand their outreach and cultivate a diverse student body.
— Jared Mitovich contributed to this report.