Colleges are going loan-free to fight student debt epidemic
Brown University joins a growing number of colleges whose financial aid packages help students attend without the burden of debt.
College students have accumulated more than $1.4 trillion in student loan debt, according to a recent snapshot of nationwide debt in the United States, and the weight of it all is wreaking havoc on their collective personal finances. Student debt has been revealed as the leading obstacle preventing millennials from buying homes.
While some of that excess comes from ill-intended exploitation – Citibank has recently been fined for misleading student borrowers and the Consumer Financial Protection Bureau has helped tens of thousands of borrowers find $750 million worth of relief from surprise defaults – much of it reflects the escalating costs of higher education.
Some institutions are now pushing back. For the 2018/19 school year, Brown University, located in Providence, Rhode Island and a member of the Ivy League, will add $4.5 million to its annual financial aid budget so new and returning students from anywhere in the world can get scholarships instead of loans as part of their financial aid. To fund the new scholarships, Brown alumni and supporters have already raised $30 million of the $120 million goal for The Brown Promise: The Future of Financial Aid at Brown.
There are more than 50 universities across the country that remove loans from the equation for students from low-income families, but far fewer (16) have dropped loans from financial aid packages for all students, according to a U.S. News & World Report. Those trendsetting institutions also happen to be the universities with the largest endowments, like Harvard ($35.7 billion) and Yale ($25.4 billion).
Meanwhile, the majority of the rest of the nation’s college students and graduates grapple with how to juggle student loan payments while dealing with rent, living expenses and the demands of their job. There are, however, options available to streamline and speed up or refinance the terms of student loans so they fit better within your budget. Consider consolidating your student debt and read our guide for helpful strategies to manage, repay and clear your debt.