Brown University announced on Thursday that it would no longer provide student loans in their financial aid packages next year. The Ivy League school decided to replace all student loans with scholarships to help students graduate with less debt, according to the Huffington Post.
Brown University said that by raising $30 million, it can now eliminate institutional loans for all returning and incoming undergraduate students.
The move to replace student loans with scholarships is intended to be for families with moderate incomes who do not qualify for larger financial-aid packages given to low-income students.
Christina Paxson, Brown President, said it amplifies the university’s commitment to attracting the “best and brightest students” regardless of their background.
The elimination of student loans for Brown University also follows other steps to make Brown University more accessible. Back in 2003, admissions decided to forbid the school from considering an applicant’s ability to pay tuition.
Brown started raising money to end loans in September. Brown University said they still need about $90 million more to sustain the program.
The students who will most likely benefit are those who previously may not have qualified for the university’s grants to low-income students from families making less than $100,000 per year, but still were not able to afford the school’s tuition of $67,000 per year with room and board. Many of those families would then take out loans to help cover the cost of attending the school.
In 2016, according to Pew Research, Americans owe more than $1.3 trillion in student loans ― with the median borrower still owing $17,000 for their education. Young college graduates with loans are more likely to be juggling more than one job and to be struggling financially after graduation.
Clark told Huffington Post that students who come to Brown University can pursue fulfilling careers instead if making decisions based on struggling with debt after graduation.
“It’s important that students who come to Brown are able to pursue fulfilling careers and not just make decisions based on grappling with debt after graduation. And when students are thinking about where to apply, the sticker price can dissuade them from even trying. We want them to know Brown is a choice for them.”
Brown University also joins about 15 to 20 four-year colleges and universities, out of more than 3,000 nationwide, that have a loan-free aid policy, including other Ivy League universities, such as Princeton and Yale.
Currently, there are more than 1,000 students that are expected to benefit from the loan-free program next year.
The program will help students graduate with less debt. However, the university can’t guarantee that all of its students will graduate debt-free. Families will still be able to take out private loans to finance a student’s books, personal expenses, or costs of travel while studying abroad.
Brown University had capped loans to students at $5,000 per year before the change.
Nadir Pearson, a junior studying sociology at Brown, said that this policy would cut his loan burden for next year. However, he will still be in debt from previous years, both from Brown and from private loans.
“I’m going to benefit from any money that they take off. It’s not everything, but it’s definitely something that can help, that I appreciate.”
Pearson said his mother is the family’s main breadwinner and usually earns around $100,000 a year.
“The pressure is building as graduation comes. It’s a bittersweet moment: You’re excited to get into the new world, but you have a mountain of debt.”
Pearson said that he is excited about new generations having less debt and won’t “have to worry about money as a factor.”
To fund the new policy, Brown will need an additional $4.5 million per year for its financial aid budget.
The university started a $120 million fundraising campaign in September. By December, Brown had already raised its initial goal of $30 million, allowing it to kick off the program. Brown University is confident that it will reach its goal to make loan-free aid a permanent policy.
Brown University and other Ivy League schools can offer these generous financial aid packages due to their big endowments, which are usually in the range of the billions of dollars. These are often supplied funds from donors.
“We’re doing everything we can here. Different schools are in different circumstances. It takes significant resources to be able to do this. But the more access and affordability there is across higher education, the better.”
A handful of states and cities, including New York, Tennessee, and San Francisco, are now offering free community college.
On Brown University’s loan-free aid policy, Pearson said that there is more that can be done and no one should be satisfied.
“Hopefully, we will see less and less costs for education ― it’s something that everyone deserves.”