Nearly two dozen universities have promised to meet 100% of their undergraduates' financial needs without loans, CNBC reported Feb. 28.
The universities — all on the Princeton Review's list of the "389 best colleges," and largely located on the East Coast — have completely eliminated student loans from their financial aid packages. But that doesn't mean their education will be completely free. Students might still have to pay for an expected family contribution, books and other fees — and depending on the school, they might be required to participate in a work study.
"Post-Covid, more schools are rolling out no-loan policies mostly on the back of Princeton, which had the money in its endowment to do something," Menaka Hampole, PhD, an assistant professor of finance at New Haven, Conn.-based Yale School of Management, told CNBC. "Princeton takes the lead and other schools follow suit — but it's the top universities that can afford to do this."
Ms. Hampole added that these universities, including Yale, are "giving [no-loan packages] out like candy now."
One such university is Lafayette College in Easton, Pa., where families with household incomes up to $200,000 have their financial needs met through grants and work study — no loans attached. Though national college enrollment has been declining since COVID-19, the no-loan policy has helped Lafayette gain new applicants, according to Forrest Stuart, PhD, its vice president for enrollment management.
"Typically, you will see a fairly sizable increase in the number of admissions applications [with a no-loan policy]," Mr. Stuart said. "It puts your school on the map. The more you can have your name out there, the more robust class we can put together."
Student debt has been a topic of national discussion as President Joe Biden continues to forgive billions of dollars in loans. Healthcare has a particularly concerning debt-to-income ratio; a recent survey from Laurel Road found that nurses' student debt loan amounts to 50% of their annual income before taxes, and physicians' debt comprises 58% of their annual income before taxes. Montefiore's Albert Einstein College of Medicine in New York City recently announced that it would offer free tuition in perpetuity following a $1 billion gift from Ruth Gottesman, EdD, chair of its board of trustees.
"This donation radically revolutionizes our ability to continue attracting students who are committed to our mission, not just those who can afford it," Yaron Tomer, MD, the Marilyn and Stanley Katz Dean at Einstein, said in a news release shared with Becker's.
These 23 universities have committed to fully meeting students' calculated financial needs sans loans, according to CNBC:
- Amherst (Mass.) College
- Bowdoin College (Brunswick, Maine)
- Brown University (Providence, R.I.)
- Colby College (Waterville, Maine)
- Dartmouth College (Hanover, N.H.)
- Davidson (N.C.) College
- Duke University (Durham, N.C.)
- Grinnell (Iowa) College
- Harvard College (Cambridge, Mass.)
- Lafayette College
- Massachusetts Institute of Technology (Cambridge)
- Northwestern University (Evanston, Ill.)
- Pomona College (Claremont, Calif.)
- Princeton (N.J.) University
- Smith College (Northampton, Mass.)
- Swarthmore (Pa.) College
- University of Pennsylvania (Philadelphia)
- Vanderbilt University (Nashville, Tenn.)
- Vassar College (Poughkeepsie, N.Y.)
- Washington University in St. Louis
- Wesleyan University (Middletown, Conn.)
- Williams College (Williamstown, Mass.)
- Yale University