Tuesday, April 13, 2010

Colleges Looking At No-Loan Financial Aid

Colleges may be seeing the handwriting on the chalkboard.

CNN Money reports:
Many colleges say they remain committed to fully funding students' financial need.

In fact, a group of schools is pledging to do it mostly through grants and work-study programs, and not with loans.

At least 50 colleges are planning to limit or remove loans from their financial aid packages, according to a report released by the Institute for College Access and Success. While 50 might not seem like a lot, their student bodies represent 8% of all four-year college students in the United States.

Schools are trying to getting away from loans in an effort to avoid saddling graduates with debt that could limit their career options and start them in a deep financial hole. So the fact that so many big schools are staying with the program is seen as good news by the institute.

That is really good news for students, and it is an indication that colleges are already seeing signs that students may be staying away because of the cost and the fear of enormous post-college debt.

However, this does make me wonder if these colleges are making up the difference with funding from somewhere else... and where exactly is that somewhere else? More research is needed to check out that aspect.

For a complete list of schools pledging to make "no-loan" or "limited-loan" financial aid packages, visit www.ProjectOnStudentDebt.org

And speaking of colleges, one school that I truly admire is Hillsdale College. Hillsdale College distinguishes itself from most other academic institutions by its rigorous, traditional core curriculum and its principled determination never to accept federal taxpayer funding.