Brown University joined the ranks this month of 16 elite colleges that offer loan-free financial aid packages to students regardless of their family incomes. The benefits to ensuring that all students graduate with minimal to no debt are clear, and these “no loan” programs aim to help make college more affordable for students nationwide.
Brown University began replacing student loan packages with university-funded scholarships for those with a total parent income of less than $100,000 a decade ago. This new initiative, dubbed The Brown Promise, will allow students with family incomes of greater than $100,000 to have part of their aid replaced with money from the institution as well.
Over the past 10 years, more and more schools have begun adopting loan-free policies for low-income students. However, this new push is targeted at middle-income students who often do not demonstrate enough need to qualify for the university's grants and find themselves in a Catch-22: their family’s income is too high for them to qualify for federal grants or need-based institutional aid, but too low for them to be able to pay outright for their tuition, fees, housing and many other costs associated with attending college.
As a result, this middle-income population of students at these institutions may be the most susceptible to accruing debt.
“Most importantly, The Brown Promise is a direct response to the needs of moderate-income students and families, who often confront difficult decisions when deciding where their students should attend college,” said James Tilton, Brown’s dean of financial aid.
As the cost of college in the United States continues to climb, schools are seeking creative measures to help defray the expense for today’s students, and some researchers and analysts are asking what can be done on a national scale to keep students with the highest financial need from accruing excess debt.
“I don’t know that this [no-loan] phenomenon is really going to have much of an impact on higher ed as a whole,” Neal McCluskey, the director of Cato Institute’s Center for Educational Freedom, a branch of the conservative think tank. “They aren't really dealing with the people from groups that tend to have the most debt.”
McCluskey said that the demographic with the highest financial need tends to be nontraditional students, or those who work full-time, are going back to school, or have kids to care for.
That said, studies show that these policies have a positive impact at the universities that adopt them.
Princeton University, the first college to offer this policy for all students, reports that more than three-fourths of their students graduate without debt, and the remaining students have loans averaging $6,000. The national average is around $30,000.
In a 2006 National Bureau of Economic Research report evaluating Harvard’s policy after one year, it found a 20 percent increase in number of lower-income students enrolled.
McCluskey said that this newfound focus on ensuring students aren’t saddled with debt after graduating may inspire schools to put a greater focus on financial aid because they will have to reevaluate how they allocate their money.
In order to fund The Brown Promise, the university had to invest time and resources in a campaign to raise $120 million. By December it had already collected $30 million, which is what allowed it to kick off the program this month.
To maintain the program, Brown will need to continue this focus on financial aid and helping students. The institution needs an additional $4.5 million a year for the financial aid budget.
“The Brown Promise ensures that students who attend Brown can pursue fulfilling, high-impact lives and careers rather than ones designed to repay loans. We also expect it to attract more highly talented moderate-income students to our applicant pool, creating opportunities for greater socioeconomic diversity among students, which we consider fundamentally important to academic excellence at Brown, " Tilton said.
Publication Date: 12/20/2017