Student loan debt in the United States has doubled since 2010. As of that year, about 44 million Americans owed a total of $1.7 trillion in loans taken out for college. To put that number in perspective: the national student debt is greater than the gross domestic product of all but eight countries.
Student debt, caused in part by decades of cuts to public funding for higher education, has reached crisis levels, depriving new generations of the 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 pave the way to starting a family and investing in equity. and intergenerational wealth.
The average US credit card balance is $6,569, while the average student debt for recent college graduates is around $30,000. This means that the typical American recent graduate leaves college and owes almost five times more than the typical American’s credit card balance. (Here are the States with the most outstanding student debt.)
To address the issue, the Biden administration announced a student debt forgiveness program this year that plans to forgive up to $20,000 in debt for eligible applicants. This would relieve tens of millions of US student loan debtors. (Here is 8 States That Might Tax Canceling Student Debt.)
Additionally, more than 20 colleges and universities in 14 states have stepped in to address the student loan crisis by implementing “loan-free” policies for undergraduates. Under these programs, students would have their financial aid needs covered by endowment-funded grants instead of loans.
To identify colleges with no student debt, 24/7 Wall St. reviewed CNBCThe list of colleges that adopted “loan-free” policies in October 2022, taken from The Princeton Review. Additional data on each college’s fall 2020 total enrollment and 2020-2021 tuition comes from the Integrated Post-Secondary Education Data System, which is part of the National Center for Education Statistics. Tuition is defined as the cost of full-time degree-seeking undergraduate students living on campus and includes tuition, books and supplies, room and board, and all other expenses. Staffing figures for each college were taken 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 “loan-free” programs include the University of Pennsylvania, Wesleyan University in Connecticut, Duke University in North Carolina, and Grinnell College in Iowa.
Some of these schools have the largest endowments in the country and low acceptance rates. Six of them have undergraduate enrollments of less than 2,000 students, so these “no loans” policies are no panacea for the student loan crisis in the United States. Nevertheless, this decision shows that these influential institutions recognize the problems of students who leave the American higher education system heavily in debt.
Here are the colleges that are getting rid of student loans.