Loans Student Loans Paying for College No-Loan Colleges: What They Are and How To Apply By Rachel Morgan Cautero Rachel Morgan Cautero Facebook Twitter Rachel Morgan Cautero has over a decade of experience as a writer and editor, specializing in personal finance and lifestyle matters. She writes about banking, saving money and budgeting, and family finances. Her work has been featured in publications such as The Balance, Business Insider, Forbes, and Yahoo Finance among others. She has a master's in journalism from NYU. learn about our editorial policies Updated on December 12, 2020 Reviewed by Marguerita Cheng Reviewed by Marguerita Cheng Twitter Marguerita is a Certified Financial Planner (CFP®), Chartered Retirement Planning Counselor (CRPC®), Retirement Income Certified Professional (RICP®), and a Chartered Socially Responsible Investing Counselor (CSRIC). She has been working in the financial planning industry for over 20 years and spends her days helping her clients gain clarity, confidence, and control over their financial lives. learn about our financial review board In This Article View All In This Article What Are No-Loan Colleges? Standard Financial Aid vs. No-Loan Applying to No-Loan Colleges The Bottom Line Photo: Tom Merton / Getty Images “No-loan colleges" are academic institutions for higher learning that offer financial aid to their students without the expectation of being reimbursed—supporting enrollment through grants and scholarships, and without federal student loans. Such colleges make graduating without student loans a guarantee, rather than a remote possibility. If you're considering higher education, research your options for attending a no-loan college, and compare the value alongside your other choices. What Are No-Loan Colleges? No-loan colleges were formed in response to the growing amount of student loan debt in the U.S., which topped $1.57 trillion in 2020, and accounts for a 116% increase over the past 10 years. Experts have estimated it will take the average borrower more than 21 years to pay off their student loans. Spearheaded by Princeton University in 2001, no-loan colleges have since emerged as a real financial option for students to offset the staggering cost of college. In their 2001 press release regarding no-loan education, Princeton leadership wrote: "Princeton University will no longer require undergraduates on financial aid to obtain loans to help pay for their education. Beginning next fall, Princeton will eliminate its loan requirement, and replace it with additional scholarship support. The "no-loan" policy extends a groundbreaking program begun with the Class of 2002 to reduce the financial burden for low- and middle-income students. In that initiative, loan requirements were eliminated for students from families earning less than $46,500 and reduced for those earning between $46,500 and $66,500 (current dollars, adjusted for inflation)." Since then, many other schools have followed suit, including: Amherst CollegeBowdoin CollegeBrown UniversityColby CollegeCollege of the OzarksColumbia UniversityDavidson CollegeHarvard UniversityHaverford CollegePomona CollegePrinceton UniversityStanford UniversitySwarthmore CollegeThe University of PennsylvaniaVanderbilt UniversityWashington and Lee UniversityYale University There are also no-loan colleges intended for low-income students only. These include: California Institute of TechnologyCollege of the Holy CrossDartmouth CollegeDuke UniversityVassar CollegeWesleyan College Standard Financial Aid vs. No-Loan In a standard financial aid package, students are likely offered a combination of financial aid instruments based on their family’s financial situation, plus any scholarships or grants they may qualify for. The student is then granted a certain amount in student loans to make up the difference. With no-loan financial aid packages, once the school has determined how much financial aid a student needs, the school covers that need with funds other than student loans. Note However, this doesn’t mean they can’t take out loans. Many no-loan colleges require parental or student contributions to tuition and if that’s not an option, the student may have to take out loans to cover the difference. Applying to No-Loan Colleges Applying and being accepted to a no-loan college may be difficult as many are top-tier colleges to begin with, and have a competitive history of application and acceptance policies. The no-loan incentives for financial aid have intensified this competition even further, but once a student has been accepted to a no-loan college, the financial aid office will help facilitate the rest. In short, they’ll determine how much tuition assistance to award, based on family income, how much the student can contribute via a summer internship or on-campus job, and any scholarships or grants they've been awarded. For example, with Columbia University’s need-based aid program, parents of students from a household making less than $60,000/annually are not required to contribute to the cost of tuition. Note If you're planning to attend a no-loan college with a restricted policy, you must be able to prove you are “low income” to qualify for a no-loan financial aid package. The Bottom Line While no-loan colleges are shining beacons of academic hope for young Americans, they simply aren’t an option for everyone, and currently benefit only the most highly competitive students. If you find that a no-loan college is not an option for you or your family, research the best grants to pay off your student loans. Grants tend to be distributed based upon specialization, such as those for nurses, lawyers, or engineers committed to a niche within public service. You may also consider attending a community college prior to transferring credits to an in-state, public university (thus reducing overall tuition costs)—especially if your state or county offers a free college program. Paying the interest on your student loans while you’re still a student will also help lower your monthly student loan payments in the future. Stay informed on where you stand with student loan refinancing options, as many federal student loans allow you to make monthly payments based on your income, or to defer payments temporarily if you're unable to pay. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Experian. "Student Loan Debt Climbs to $1.4 Trillion in 2019." One Wisconsin Institute. "Impact of Student Loan Debt on Homeownership Trends and Vehicle Purchasing." Princeton. "Grants To Replace Loans for All Students on Financial Aid."