"The cost of attending college continues to rise for American students. To ease the financial burden on families and students, a small subset of schools have instituted "no-loan" policies, removing federal loans from financial aid packages and replacing those funds with scholarships, grants and work-study," U.S. News & World Report writes.
..."Federal student loans are issued by the government and have fixed interest rates set by law. In contrast, private student loans are issued by private entities like banks and credit unions, which set their own terms. Private loans are generally more expensive than federal loans due to variable interest rates, which are often higher than federal student loan interest rates, according to the U.S. Department of Education.
'Some families end up being surprised and had expected more grant assistance because their personal level of need is higher than what comes out in the CSS Profile, for example,' says Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators. 'Take a look at how your school is assessing what that level of need is. If it is through a CSS Profile, then make sure you're familiar with what the CSS results show so you know what to expect.'
When considering schools that claim to have no-loan policies, students should remember that the parameters vary. Some institutions limit no loans to students from lower- or moderate-income households, and some also still require a minimum contribution from students before the policy takes effect, according to data collected in the most recent U.S. News survey."
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 9/22/2022