Increasingly, college is only an option for those who can afford it or who are willing to go into massive debt. But not all schools see it that way.
To make higher education more accessible, a growing number of institutions are eliminating student loans altogether.
More than 20 schools now have “loan-free” policies, meaning they will meet 100% of undergraduate student financial aid needs – with no education debt.
“Loans are not part of the deal,” said Anne Harris, president of Grinnell College in Grinnell, Iowa, which offers grants in the school’s financial aid programs instead of loans. “The clarity of that has been invigorating.”
Coming out of the pandemic, Grinnell committed to college, Harris said, and implemented a no-loan policy for the 2021-22 academic year.
“Doing this doesn’t solve all the problems that exist, but it is a decisive step forward,” she said.
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This opened the door for sophomore Beck Lambert, from Manchester, New Hampshire, who could not afford college. “I couldn’t even afford to apply to go to college,” Lambert said.
Lambert, 20, had previously worked full-time at a gas station to help cover high school costs and was hesitant to borrow money for college. “I didn’t want to be in debt for the rest of my life,” Lambert said. “When you’ve lived with debt hanging over your shoulders, it can be terrifying.”
Lambert enforced an early decision and is now a sophomore at Grinnell, majoring in history – on track to be the first person in Lambert’s family to graduate from college.
“Accessibility and affordability are the future”
According to Robert Franek, editor of The Princeton Review and author of “The Best 388 Colleges”, many prospective students are concerned about paying for college and the burden of student loans it may entail.
“If you can be a school without a loan, that will be important,” he said.
“I see them as pioneers in their ability to broadcast the greatest concern of a family, which is going into too much debt to pay for their studies,” added Franek. “They listen to students and their families, and they respond directly.”
As the student loan forgiveness debate continues, the best way forward “is to limit the need for students to borrow in the first place,” said John Leach, associate vice provost at Emory University. for registration and financial assistance. “Schools like Emory feel that responsibility very much.”
Recently, Emory expanded its financial aid offerings to cover 100% of demonstrated need by replacing loans with grants. The additional cost to the school was about $8 million, according to Leach.
“Budget modeling is key,” Grinnell’s Harris also noted. “If this is said, can it be supported? Funding a loan-free policy costs Grinnell an additional $5 million a year, she estimated.
“Schools that are able to do this are either moving in that direction or have already done so,” Leach said.
Davidson College in Davidson, North Carolina has had a no-loan policy in place since 2007.
“We were the first national liberal arts college to make this commitment,” said Doug Hicks, president of Davidson.
“Accessibility and affordability is the future,” Hicks said. “As a parent myself, I know that.”
Generous aid offers provide a ‘competitive advantage’
Certainly, there is also an advantage for colleges.
At Davidson, the volume of requests has risen to 6,500 today, from about 4,500 requests in 2007, when the school first eliminated loans. This, in turn, improved school performance – or the percentage of students who choose to enroll after being admitted – and the grade level.
“We saw a much more diverse student body,” Hicks said. “A student body that is much more interesting.”
“Being able to support students and have a world-class financial aid program helps us have a world-class student body,” Emory’s Leach also said. “It’s a competitive advantage to have more generous aid based on need.”
“No loan does not mean free”
Of course, students may still be responsible for the expected family contribution, as well as other costs, including books and fees. There might also be a work study requirement, depending on the school.
“No loan doesn’t mean free,” Franek noted.
Lambert, for example, works two part-time jobs on campus to cover the family contribution, which is about $1,800 per semester.
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