That’s changed in the two years since Grinnell said it would try to get financial help without a loan

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In November 2020, colleges and their millions of students were taking the economic bite of the coronavirus pandemic.

Colleges cut costs after closing campuses leading many to recoup extra fees for services such as residence and dining halls, which support their budgets. They have paid for costly COVID-19 tests and protections and directed more financial aid to students.

A budget crisis often meant it was time for austerity. But that month, Grinnell College, a private liberal arts institution in central Iowa, bucked the trends. She announced that she would put in $5 million a year selective loans of financial aid packages for attendees, enabling them to rely solely on grants, scholarships, and money earned from student employment. I have scheduled the changes to become effective in the fall of 2021 for all applicants eligible for need-based assistance.

Grinnell President Ann Harris — who took over as CEO in 2020 after joining the college as a senior principal in 2019 — at the time described the policy as one that would effectively cut student indebtedness from an average of $20,000. when they graduate. .

Students can still get loans if they want to, Harris said in a recent interview, and two years after the college’s announcement, the average debt load of Grinnell alumni still hovers around $20,000. The college also did not forgive past loans to those who had borrowed under previous financial aid packages.

But Harris does not consider the no-loan method a failure. Instead, she said, it has reduced the need for students to work while studying at Grinnell, and greatly simplified the financial aid process — winning reasons for maintaining the policy.

Higher education experts also see value in loan-free financial aid, which research shows can boost the enrollment of low-income students. Only a small sliver of wealthy institutions can get it to work, however, and it requires careful financial oversight and planning, which is what Grenell said she hired.

An idea stemming from Princeton University

In 2001, Princeton University was the leader in terms of observers It’s called the “radical” acceptance strategy.: Million dollar commitment To remove loans from granting financial aid.

Higher education leaders have praised Princeton, one of the nation’s wealthiest institutions, for drawing on its talent to experiment with a no-lending approach.

In a trend of following the leader in higher education, other institutions—first, wealthy private Princeton peers, and later prominent public colleges—began to pursue similar policies.

Now, at least 20 colleges are offering undergraduates financial aid packages that allow them to avoid debt, Princeton said last year. Many institutions drop loans to students and families below certain income thresholds.

The benefits of no-loan policies at Princeton and these other colleges are well documented.

The Ivy League said more than 80% of Princeton students graduated debt-free.

More broadly, loan-free program adoption can raise enrollment of low-income students by approximately 3 to 6 percentage points at institutions that offer loan-free admissions, found a 2013 study.

It can also help attract applicants and reduce barriers for families who find it difficult to navigate the grueling financial aid process, said Jill Degen, senior policy analyst for the National Association of Student Financial Aid Administrators.

Often, many types of funding include financial aid packages — state and federal loans, scholarships, merit aid, need-based aid, Degen said.

“For some students, this is their first experience with debt,” she said. “The terms you get used to as an adult — interest, repayment schedules, things like that — can be hard to understand, so not taking out loans simplifies things quite a bit.”

Harris said that officials at Grinnell realized during the pandemic that they were already pouring funding into several disparate assistance initiatives. Grinnell paid for the students’ computers and travel home. She said the college covered the costs for those who were food insecure.

“Then we started to realize, if we incorporate this into a big step, like no loan, we can really make a difference,” Harris said.

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