These faculties don’t promise pupil loans

Increasingly, college is only an option for those who can afford it or are willing to incur massive student 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 a “no loan” policy, meaning they will meet 100% of student financial aid needs — with no educational debt.

“Loans aren’t part of the deal,” said Anne Harris, the president of Grinnell College in Grinnell, Iowa, which offers grants in the school’s financial aid packages instead of loans. “The clarity of it was invigorating.”

In the wake of the pandemic, Grinnell became committed to college access, Harris said, and instituted a no-credit policy for the 2021-2022 academic year.

“It won’t solve all the problems that exist, but it’s a crucial step forward,” she said.

More from Personal Finance:
Student loan forgiveness applications will be online soon
This is the best time to apply for student grants
Colleges struggle with enrollment declines and underfunding

That opened the door to Beck Lambert of Manchester, New Hampshire, who couldn’t afford college. “I couldn’t even afford to apply to college,” Lambert said.

Lambert, 20, had already worked full-time at a gas station to pay for high school and was reluctant to borrow money for college. “I didn’t want to be in debt for the rest of my life,” Lambert said. “When you’ve been living with debt hanging over your shoulders, it can be terrifying.”

Lambert made an early decision and is now studying history at Grinnell – on track to be the first in the family to graduate from college.

Grinell College

Photo: Grinell

“Accessibility and affordability is the future”

According to Robert Franek, editor-in-chief of The Princeton Review and author of “The Best 388 Colleges,” there are many prospective college students who worry about the cost of college and the strain of student loans that comes with it.

“If you can be a no-loan school, that’s going to matter,” he said.

“I see her as a trailblazer in her ability to allay a family’s number one concern, which is taking on too much debt to pay for college,” added Franek. “They listen to the students and their families and respond directly.”

Schools that are able to do this are moving in that direction.

John Leach

Associate Vice Provost for Enrollment and Financial Aid at Emory University

As the student loan forgiveness debate continues, “the best way forward is to limit the need for student borrowing in the first place,” said John Leach, Emory University’s associate vice provost for enrollment and financial aid. “Schools like Emory are very committed to that responsibility.”

Recently, Emory expanded its grant offering to cover 100% of proven needs by replacing loans with grants. The additional cost to the school was around $8 million, according to Leach.

“Budget modeling is key,” also noted Grinnell’s Harris. “If it is said, can it be sustained?” Funding a no-loan policy costs Grinnell an additional $5 million a year, she estimated.

“Schools that are able to do that are moving in that direction or have already moved in that direction,” Leach said.

Accessibility and affordability is the future.

Doug Hicks

President of Davidson College

Davidson College in Davidson, North Carolina has had a no-loan policy since 2007.

“We were the first national liberal arts college to make that commitment,” said Doug Hicks, President of Davidson.

“Accessibility and affordability is the future,” Hicks said. “As a parent myself, I know that.”

Generous offers of help confer a ‘competitive advantage’

Colleges also benefit from the no-loan policy.

At Davidson, the volume of applications has risen from around 4,500 in 2007, when the school first abolished loans, to 6,500 today. That, in turn, has improved the school’s output—or has it the percentage of students who decide to enroll after admission — and academic status.

“We’ve seen a much more diverse student body,” Hicks said. “A student body that’s much more interesting.”

“Being able to support students and having a world-class financial assistance program helps us have a world-class student body,” Emory’s Leach also said. “It’s a competitive advantage to have more generous needs-based aid.”

“No credit means no free”

Of course, students can still pay for the expected family contribution, as well as other expenses, including books and fees. Depending on the school, a dual degree may also be required.

“No credit means no free,” noted Franek.

Lambert, for example, works two part-time jobs on campus to meet the family contribution, which is approximately $1,800 per semester.

Correction: This story has been updated with the correct spelling of a city on the map.

Subscribe to CNBC on YouTube.