Colleges increasingly replace student loans with grants
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Carleton College in Minnesota recently decided to eliminate student loans from its financial aid packages, offering grants and scholarships instead.
The college stated that roughly one-third of each incoming class comes from middle-income families, and these students will particularly benefit from the change. This policy applies to both future and currently enrolled students, and Carleton plans to fund it with $80 million in donations, while seeking an additional $48 million.
Asbury Theological Seminary in Kentucky made a similar decision, planning to phase out federal student loans and increase scholarship funding so students can “graduate with less debt.” Princeton University pioneered this approach in 2001, and Harvard and Yale later followed suit, responding to a national student debt crisis. Over 40 million Americans currently carry $1.7 trillion in student loan debt.
Business Insider has reported hearing from many borrowers who struggle with payments due to high interest rates and job market challenges. The Trump administration attempted to address the issue with repayment plan changes, which the Education Department said would simplify the system and encourage colleges to lower tuition, though some borrowers reported increased monthly payments.
