Here's The Rundown On Colleges With 'No-Loan' Policies
To help its students with their debt loads, some universities have eliminated loans.
by Nick Fenley
October 13, 2022 at 10:23 pm
The vast majority of these schools appear to be based in the northeastern United States, according to a list compiled by CNBC; the outlet also reports that 6 Ivy League institutions made the list: Harvard, Dartmouth, Princeton, Brown, the University of Pennsylvania and Yale.
Some other well-known universities on the list include Duke, Northwestern, the Massachusetts Institute of Technology, Smith College, Vanderbilt, and Amherst College.
Bowdoin College, Davidson College, Grinnell College, Wesleyan University, Lafayette College, Pomona College, Swarthmore College, Washington University in St. Louis, Vassar College and Williams College round out the 22-school catalog.
“Loans are not part of the deal,” Anne Harris, the president of Iowa’s Grinnell College, said, according to CNBC. “The clarity of that has been invigorating.”
“Doing this doesn’t solve all the issues that are out there, but it is a decisive step forward,” Harris optimistically added, noting that Grinnell College offers grants within financial aid packages in lieu of formal loans.
One Grinnell-goer named Beck Lambert — a first-generation student who’s majoring in history — is someone who definitely benefits from the college’s no-loan policy.
“I couldn’t even afford to apply to go to college,” he shared, CNBC reports.
“I did not want to be in debt for the rest of my life,” Lambert explained. “When you’ve lived with debt looming over your shoulders, it can be terrifying.”
Robert Franek, editor-in-chief of The Princeton Review, noted that Lambert’s situation is a common story for many Americans looking into a college education.
“If you can be a no-loan school that’s going to be significant,” he explained, CNBC reports. “I see them as trailblazers in their ability to diffuse a family’s biggest concern, which is taking on too much debt to pay for college.”
“They are listening to students and their families, and they are directly responding,” Franek continued.
While the prospect of replacing loans with grants seems simple, sustainability is a major factor that has to be reckoned with.
“The budget modeling is key,” Anne Harris noted, adding that Grinnell’s no-loan policy costs the school an extra $5M each year. “If it gets said, can it be sustained?”
We should also add that, while no-loan policies can prevent students from going into debt in pursuit of their degree, “No-loan doesn’t mean free,” as Franek puts it.
On top of necessary course materials and standard university fees, there’s also the expected family contribution (EFC), which is a calculated number that determines how much the institution expects the student to pay towards college costs each semester.
To cover Grinnell’s $1,800 EFC, Lambert works a couple of on-campus jobs, indicating that there’s still some financial requirements that students at no-loan schools will have to meet.
What do you think about the prospect of colleges having no-loan policies?