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No Loan Colleges--No Catch?

siilverlightsiilverlight Posts: 46Registered User Junior Member
Hi, I've read a LOT about no loan colleges like some listed here:
Project on Student Debt: Financial Aid Pledges
and how they meet 100% full demonstrated need,
but I just needed to verify it. It just seems too good to be true.
I mean, so if I were to apply to Brown, who meets 100% need and has a no loan policy, would I truly be able to go to school there for basically free? (besides work-studies and student contributions)
I feel like there will be some catch, and I'll get to a college, and they'd be like, "HA! Just kidding!"
So, would these schools cover all of my expenses--tuition+roomandboard+books+etc, or just tuition? Or if I am just accepted to these schools and simply complete the CSS and FAFSA, will I be able to go to college for free?
Please, answer, I just need to clear some doubts and worries. Thanks! :)
Post edited by siilverlight on
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Replies to: No Loan Colleges--No Catch?

  • 2college2college2college2college Posts: 1,523- Senior Member
    The only potential catch is that what they expect many families to pay is more than they feel they can afford. But if you've used their calculator and your family is comfortable with your EFC, no catch.
  • siilverlightsiilverlight Posts: 46Registered User Junior Member
    So there isn;t an additional app process for aid (besides css and fafsa)?
  • KatMTKatMT Posts: 3,325College Rep Senior Member
    Have you run the EFC calculators on the websites for the schools to which you plan to apply?

    Basically, the SCHOOLS determine how much you and your family can afford to pay. Schools that meet 100% of demonstrated need without loans will then cover the difference between what they expect your family to pay and the cost of attendance with work study and grants.
  • college_ruledcollege_ruled Posts: 1,243Registered User Senior Member
    Generally speaking, transportation costs, books, personal supplies, and general expenses, etc., are built into your cost of attendance. Almost always students pay for these aforementioned expenses through their own earnings from summer & work study. I suppose another technicality is that you have to be able to get a job.
  • mom2collegekidsmom2collegekids Posts: 57,840Registered User Senior Member
    A "catch" might be is that the "no loan" policy may be in effect for freshman year, but during some later year, the school may have to include loans.

    Schools can change their FA policies from year to year.


    If your "family contribution" ends up higher than your family can pay, then you may need to take out a loan.


    If you end up not being able to get a work-study job, you may have to get a loan.

    If you don't/can't do a summer job, and can't come up with your summer contribution, you may have to get a loan.


    While "personal expenses" are built into COA, I've noticed that the amounts for summer contribution and work-study often match or exceed that amount. I don't think schools want to give grants to pay for shampoo, hair-cuts, and deodorant.
  • college_ruledcollege_ruled Posts: 1,243Registered User Senior Member
    Oh and sometimes colleges will insist that you have health insurance, but not include that amount in your cost of attendance.
  • vonlostvonlost Posts: 13,631Super Moderator Senior Member
    "No Loan Colleges--No Catch?"

    Don't read more into this than what it says. All it means is when you graduate, you won't owe the school any loan debt. It says nothing about fees, costs, jobs, EFC, personal expenses, etc.
  • radannieradannie Posts: 602Registered User Member
    Yes, and i have a daughter attending one of those colleges on the list that from what I read there says no loans but let me tell you she will graduate w/a hefty handful! If possible, ask for prereads...if schools won't give you one, I have been able to pry info. from some financial aid folks will give you a better idea if you give them a bit more of your specific financial info.....another thing to notice is rarely do you see any sort of example of financial aid packages offered to those in the ~+-$100k income range....results can vary dramatically between those earning say $70k and those earning $145k.
  • calmomcalmom Posts: 15,731Registered User Senior Member
    Actually, the student wouldn't owe "the school" loan debt in any case -- they would owe to the lender (these days, that generally means the federal government as it has gone all to federal direct loans).

    But many students at the "no loan" schools do in fact take loans. The loan policies mean simply that that colleges do not write loans into their financial aid package -- that is, they do not use loans as a resource to meet need.

    They still meet need as they determine it, which is why many students probably end up with loans anyway. For example -- suppose there is a student with a FAFSA EFC of $8,000 -- the college calculates the family's theoretical ability to pay, using the CSS, as $15,000 -- that means that the student will still be fully eligible for federal loans, even after student aid is considered -- as the student still has unmet need according to the FAFSA.

    But the main "catch" is that the schools that have adopted no-loan policies tend to be extremely difficult to get into. Any student who is capable of gaining admission to those schools will probably also qualify for generous financial aid, and often better merit-based aid, at other colleges -- so the no-loan policy is really part of the school's way of staying competitive financially with colleges that offer merit aid.
  • vonlostvonlost Posts: 13,631Super Moderator Senior Member
    "she will graduate w/a hefty handful!"

    Can you say why?

    "they do not use loans as a resource to meet need."

    Well said; that could be considered a "catch!"
  • calmomcalmom Posts: 15,731Registered User Senior Member
    I am guessing that radannie's daughter fits the scenario I laid out -- the college's idea of "need" was different than reality -- so the daughter used loans to make up the shortfall between what the college thought they should pay and what they could afford to pay.

    As I noted above, if the college fails to meet the FAFSA EFC, then the student remains eligible for subsidized loans for the difference, up to the maximum available via the Stafford program. Even if not, the student would be eligible to take an unsubsidized Stafford and may also opt for private lenders.

    I'd add one other thing -- because the OP was asking whether he could attend college for free at the no-loan schools. Even if the EFC is 0, ALL schools require a student contribution from expected earnings -- generally of at least $1800 and usually increasing slightly over the years. So there is no such thing as a 'free ride" to a college offering only need-based aid, whether or not they write loans into the financial aid package.
  • vonlostvonlost Posts: 13,631Super Moderator Senior Member
    I realize I don't know: can students normally qualify for the additional loans used to pay EFC (or gap), or are they usually in the parents' names? I.e., when radannie says "she will graduate w/a hefty handful" are they likely parent loans?
  • calmomcalmom Posts: 15,731Registered User Senior Member
    I'm going to set up an illustration of 3 hypothetical colleges to clarify the situation. Let's assume that the FAFSA EFC is $10,000; COA is $50,000; and that the family owns a home with enough equity to push the perceived family resources up to $20,000 for colleges that consider home equity.

    College A: Requires loans; considers home equity.

    Financial aid package:

    Loans: $5000
    Work-study: $1000
    Grant: $24,000
    Expected family payment: $20,000

    College B: No loans; considers home equity.

    Financial aid package:

    Loans: $0
    Work-study: $3000
    Grant: $27,000
    Expected family payment: $20,000


    College C: Requires loans; does not consider home equity.

    Financial aid package:

    Loans: $7000
    Work-study: $2000
    Grant: $31,000
    Expected family payment: $10,000


    If you look just at the loan piece in each of the examples, then College B (0) would look a lot better than A or C ($5/$7k).

    Yet even with no loans, college B is only giving $3000 more in grant money than College A. Why? Because in my hypothetical the no-loan college expects $2000 more in work study. Of the three types of financial aid, (loan, grant, work-study), work-study puts the greatest short-term burden on the student, and work-study dollars are not payed out unless and until the student earns them.

    But the more significant piece of my hypothetical is that the the largest grant by far is coming from college C, which also imposes the largest loan burden. If you looked merely at the financial aid as packaged by the college, then it would seem that college C. would leave the student with a lot more debt.

    But the reality is that colleges A & B are assuming that the family will come up with $10K more up front each year. If in fact the family can afford that, then they can opt not to take the loans at college C, and even if the student doesn't work either -- they are still coming out way ahead of the no-loan college.

    On the other hand... if the family can't come up with that extra $10K -- the kid is going to end up borrowing the money, whether or not it is included in the loan package or not.

    I would tend to start any financial aid analysis by looking at the overall COA and grants to begin with. In real life the situation is far more complex because COA is not the same -- which is why my d's financial aid awards from in-state publics that did not meet full need and did require loans was clearly much better than the aid from the private colleges, with or without loans --- since in a sense the lower COA for in-state residents at the public u. is a hidden "grant" worth approx. $30K to all students.
  • calmomcalmom Posts: 15,731Registered User Senior Member
    I realize I don't know: can students normally qualify for the additional loans used to pay EFC (or gap)

    If there is unmet need using the FAFSA, then the student qualifies for subsidized staffords to the extent of the unmet need. The federal government doesn't care what the college thinks the family can pay -- they are just looking at eligibility for loans based on their own standards.

    That is, in my hypothetical above, the student at college B is eligible to borrow the full amount available as a subsidized Stafford, because the college only "met" a perceived $20K family contribution, whereas FAFSA sets EFC at $10K -- therefore there is $10K of unmet need.

    I believe that even if need is met, all students are eligible for an unsubsidized Stafford -- in their own name - but I don't remember the total dollar amount that would be available.
  • swimcatsmomswimcatsmom Posts: 14,875Registered User Senior Member
    If there is unmet need using the FAFSA, then the student qualifies for subsidized staffords to the extent of the unmet need.
    Not really. The amount of subsidized loan eligibility is very limited. For a freshman the maximum total Stafford loan is $5500 of which up to $3500 may be a subsidized loan, if there is need. So if a freshman student has unmet need of $6,000 he will only get $3500 in subsidized Stafford loans.
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