ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

Top US Universities’ ‘No-Loan’ Policy Spells Relief for Students

Nearly 24 colleges and universities have implemented "no-loan" policies, pledging to fulfill undergraduate financial requirements entirely through grants.
PUBLISHED FEB 29, 2024
Cover Image Source: Top institutions are implementing a 'no-loan' policy | Photo by Keira Burton | Pexels
Cover Image Source: Top institutions are implementing a 'no-loan' policy | Photo by Keira Burton | Pexels

Recent reports indicate that unless there's a substantial donation of around $1 billion or a widespread forgiveness of student loans, attending college is becoming increasingly limited to those who can afford it. About 24 institutions have chosen "no-loan" policies, which means they have completely removed student loans from their financial aid packages.

Menaka Hampole, an assistant professor of finance at Yale School of Management, said that a few universities are now implementing these regulations very commonly.  Among the universities featured in The Princeton Review's "The Best 389 Colleges," 23 promise to fulfill 100% of their undergraduates' financial needs without resorting to loans. 

Image Source: Photo by Pixabay | Pexels
Universities are opting for "no-loan" policies (representative image) | Photo by Pixabay | Pexels

According to Hampole, more institutions are implementing no-loan policies after seeing Princeton's example, which had the financial capacity to launch such an initiative. She added that when Princeton makes a step, other colleges follow suit, but it is largely the elite universities that can handle this due to the availability of financial resources.

Colin Hatton, a senior consultant with NEPC's endowments and foundations division, said that universities across the country are suffering post-Covid problems, such as fewer students and lower tuition revenue. This has had an especially significant influence on college endowments. Hatton stated that the higher education sector is currently under severe pressure and hurdles.

Even if students do not take out loans, they may still be required to pay the expected family contribution and other expenses like books and fees. Some colleges may also require students to enroll in work-study programs. Even if a school has a no-loan policy, it does not prevent students or families from borrowing money to satisfy their financial needs.

Robert Franek, the editor-in-chief of The Princeton Review and author of "The Best 389 Colleges," stated that having a no-loan program does not imply that everything is free.

Image Source: Photo by Andrea Piacquadio | Pexels
Having a no-loan program does not imply everything is free (representative image) | Photo by Andrea Piacquadio | Pexels

Nicole Hurd, president of Lafayette College in Pennsylvania, highlighted the need to keep college affordable despite its high tuition. Lafayette provides financial help to families earning up to $200,000 through grants and work-study programs, eliminating the need for debt. Hurd feels it is a moral obligation to ensure that low- and moderate-income families understand that investing in college means investing in themselves.

Meanwhile, Colby College in Maine has maintained a no-loan policy since 2008. Terra Gallo, a senior studying environmental policy, emphasized the importance of this program for her and her family because it relieves the burden of student debt. Many of her peers value Colby's commitment to addressing such financial needs.

Jackie Hardwick, another senior at Colby, emphasized that the cost of tuition was her top priority when selecting a college. Without scholarships and financial help, she would be unable to attend Colby, especially given her family's large intended contribution. Hardwick works various part-time jobs at school to support herself and her family's needs. Randi Maloney, Colby's dean of admissions and financial aid, highlighted the powerful message of the no-loan policy, especially at a time when many families are concerned about the cost of higher education.

Image Source: Photo by Pixabay | Pexels
Students are concerned about the cost of higher education (representative image) | Photo by Pixabay | Pexels

Franek noted that these schools have effectively addressed the primary worry of students and parents, which is the fear of incurring enormous debt. By introducing no-loan policies, they are acknowledging and assuring students and parents.

Furthermore, such activities are likely to attract more applications, increasing a college's yield—the percentage of admitted students who opt to enroll—an important indicator for institutions. Franek noted how this method benefits both schools and kids.

MORE ON MARKET REALIST
The comedian was impressed by the simplicity of the product and amused by the pitch.
5 hours ago
Harrison usually makes smart deals on the show, but this vintage car buy turned into a costly mistake.
8 hours ago
Had she started the game in a better way, she might have won the five-figure prize money.
9 hours ago
Barbara Corcoran made the exact same offer, and she wasn't happy about being rejected.
1 day ago
The guest believed that it was worth a modest amount of money, but that was clearly not the case.
1 day ago
With James Holzhauer in the lead, Amy Schneider and Andrew He decided to joke around.
1 day ago
Barbara Corcoran told the founders that she had never seen Greiner so passionate.
1 day ago
The guest said that it was left to her by her grandmother who passed at the age of 102.
2 days ago
The host was quick to latch on to his way of speaking and made a mockery of it on TV.
2 days ago
The contestant was clearly just happy to win the chance of being on the same stage as Drew Carey.
2 days ago
The player, Thomas Russo, nearly put all of his strength into spinning the wheel.
2 days ago
Things took a turn for the better with the shark as far as the entrepreneurs were concerned.
3 days ago
The expert pointed out the intricate details on the item and said it was a personal item of the royals.
3 days ago
The expert said that if the signature was on a letterhead when Garfield was President, it would be worth more.
3 days ago
Had the contestants not gotten their gamble right, they would have lost everything they'd earned.
4 days ago
The revelation came thanks to a fan who asked the question during a "Jeopardy!" taping.
4 days ago
The entrepreneurs' decision came as a big shock to the sharks, and they did not hide it.
4 days ago
Tina double-guessed her third answer, "Does April have 31 days?" Harvey gave her the stink eye.
4 days ago
All the theatrics didn't work when sharks started scrutinizing profit margins.
4 days ago
"Can I stop at any time?" the player nervously inquired. "You can stop any time you want, yes," Carey assured.
4 days ago