U.S. student loan debt has doubled since 2010. As of this year, about 44 million Americans owed a combined $1.7 trillion in loans taken for their higher education. To put that number into perspective: the national student debt is larger than the gross domestic product of all but eight countries.
The student debt, caused in part by decades of cuts to state higher education funding, has reached crisis levels, robbing newer generations of economic opportunities enjoyed by previous ones. Partly because of student debt, many today lack the ability to save to buy a home and build good credit, which can open the way for starting a family and investing in equity and intergenerational wealth.
The average American credit card balance is $6,569, while the average student loan debt for recent college graduates is about $30,000. This means the typical recent U.S. graduate is leaving college owing almost five times more than the typical American’s credit card balance. (These are the states with the most past due student debt.)
To address the matter, the Biden administration announced this year a student-debt forgiveness program that plans to cancel up to $20,000 in debt for eligible applicants. This would provide relief for tens of millions of American student-loan debtors. (Here are 8 states that might tax student debt forgiveness.)
Additionally, more than 20 colleges and universities in 14 states have stepped in to address the student-loan crisis by implementing “no-loan” policies for undergraduates. Under these programs, students would have their financial aid needs covered by endowment-funded grants instead of loans.
To identify the colleges with no student debt, 24/7 Wall St. reviewed CNBC’s list of colleges that have adopted “no loan” policies as of October 2022, sourced from The Princeton Review. Additional data on fall 2020 total enrollment and the 2020-2021 tuition of each college came from the Integrated Postsecondary Education Data System, part of the National Center for Education Statistics. Tuition is defined as the cost of full-time, first-time degree seeking undergraduates living on campus and includes the cost of tuition, books and supplies, room and board, and any other expenses. Endowment figures for each college came from specific college resources and are current as of June 2021.
Massachusetts is home to five of the institutions on the list: Amherst, Harvard, Smith, Williams, and MIT. Other schools offering “no-loan” programs include the University of Pennsylvania, Wesleyan University in Connecticut, Duke University in North Carolina, and Iowa’s Grinnell College.
Some of these schools have the largest endowments in the country and low acceptance rates. Six of them have undergraduate enrollments of fewer than 2,000 students, so these “no-loan” policies are not a panacea to the U.S. student loan crisis. Nevertheless, the move shows that these influential institutions are acknowledging the problems of students leaving the U.S. higher education system highly in debt.
Here are the colleges getting rid of student loans.
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