Correction:
Earlier versions of this article said that Colby College in Maine pledged to eliminate loans as part of aid packages for in-state students. The college did establish such a policy in 2008, but it later extended it to all aid recipients. This version has been corrected.
Megan Tuck is living that pleasant lull between college and career, traveling from her Suitland home to a different Starbucks each day with her laptop to look for a job.
Tuck has no urgent need for a paycheck because she attended Duke University on a full ride. She is among the first beneficiaries of “no-loan” financial aid, a movement to eliminate the student loan as a fact of life at dozens of the most expensive U.S. colleges.
A look at how some colleges are trying to reduce student debt.
More than 70 colleges have replaced loans with grants in financial aid awards, at least for their neediest students, a wave of largess that spread nationwide in 2007 and 2008. Now, some of the first students to benefit are graduating, often debt-free.
“For me to be able to look for a job and an apartment and not have to worry about $25,000 in loans is amazing,” Tuck said. “I don’t have the monetary resources that a lot of other students at Duke have.”
No-loan pledges effectively reduce the price of college to zero for a select group of disadvantaged students at elite national universities and liberal arts schools.
Students from low-income families are enjoying a buyer’s market in higher education. Prestigious colleges are falling over one another to offer aid on favorable terms to these promising students from disadvantaged homes. The aid pledges are part of a broader movement among top universities toward admitting students without regard to need and meeting all of that need with financial aid.
“They’re essentially chasing after the same group of low-income students who are academically talented,” said Mark Kantrowitz, an industry expert who is tracking 73 colleges that have eliminated or capped student loans. “If you get in, these schools are a great deal.”
At the most generous (and wealthiest) institutions, Harvard and Yale, even comparatively wealthy families now pay no more than 10 percent of household earnings toward college — perhaps the first time in academia that families earning up to $180,000 have been regarded as needy.
Elsewhere, student loan policies vary widely. Pomona College in California eliminated loans from aid awards in 2008. Colby College in Maine made the same pledge, but only for Maine residents; it later extended the policy to all aid recipients. Emory University in Atlanta eliminated loans in 2007 for students in financial need and capped four-year loan debt at $15,000 for families earning up to $100,000.
“The objective,” said Emory President James Wagner, “is to be able to recruit students who are appropriate for our institution, without barriers.”
The movement has spread to several public flagships, including the universities of Virginia and Maryland and the College of William and Mary. But experts who track the movement say that only one top private college in the region, Washington and Lee University in Virginia, has eliminated loans. Others, including Georgetown, Johns Hopkins and George Washington universities, typically pledge to meet student need with a package that can include loans.
Eliminating student loans is a costly initiative that “no more than a couple hundred colleges” with the largest endowments could afford, Kantrowitz said.
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