Student Loans Get the Boot at This Elite School
The University of Chicago has joined a handful of other universities in eliminating student loans from its need-based financial aid packages. The school’s new “No Barriers” program will replace student loans with grants – which do not need to be repaid – and waive application fees for families seeking financial aid.
The university will also expand its scholarship program for “underserved and underrepresented groups,” simplifying the financial aid process.
Related: Why Easy Student Loans Are a Moral Hazard
The reason for all of this? To attract more low-income and moderate-income students to the university. “We want to ensure that students of high ability can aspire to join this community without financial worry, and with comprehensive support for their success, both in college and beyond graduation,” University of Chicago President Robert Zimmer said in a statement.
The program will be phased in beginning with the Class of 2019, which starts college next fall. Part of the funding will come from a new fundraising campaign, which launches at the end of this month. Dean Robert Boyer told The New York Times that the campaign aimed to raise $150 million to $200 million for financial aid. The university has a $6.7 billion endowment.
Related: 300,000 Reasons to Go to College
The moves, taken together, may help the school develop a more diversified student body. A recent analysis by The New York Times found the school was below average among top colleges in economic diversity, as measured by the number of students receiving Pell grants and the school’s net price for low- to middle-income students.
A number of other colleges have put limits on student loans, based on a family’s income or a student’s residency, but few have eliminated student loans entirely. Notably, the No Barriers program will not assume that students are working part-time when calculating aid packages.
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