No-loan college and student loan crisis

Student loans have become quite the hot-button topic. And it’s no wonder why. According to the Federal Reserve, the United States owes over $1.6 trillion of student loan debt—yeah, that’s trillion with a T.1 It seems like everyone is trying to solve this problem with some good (and some not so good) solutions. So, how can you tell the good from the bad? Let’s start by exploring one of the concepts that’s been gaining traction: no-loan college.

If you’ve never heard of no-loan college, it’s pretty much what it sounds like. Basically, students who are deemed unable to afford tuition are offered financial aid without the expectation of repayment. Instead of taking out federal or private loans, students receive funding for tuition that comes from grants or endowments—kind of like a scholarship. In 2001, Princeton was the first university to introduce the no-loan concept, and over the last 20 or so years, about 40 other colleges nationwide have followed suit.

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