(InvestigateTV) — A no-loan college is exactly what it sounds like, schools that help students pay for college without student loans. They often offer grants and scholarships instead of student loans for families that might have financial need.
Robert Farrington, the founder of The College Investor, said financial need is often calculated as the difference between the student’s student aid index and the actual cost of attending the college.
“There might be a gap there that isn’t being filled by existing things like a Pell Grant and things like that,” Farrington explained. “And so, these colleges have vowed to step in with their own money to offer grants and scholarships to fill that difference.”
He said about 60 colleges nationwide currently have no-loan policies, but that list is growing every year. They are mostly private colleges with high sticker prices.
“That shouldn’t dissuade you from applying because these colleges do have these no loan policies,” Farrington said. “So, even though the sticker price might be very high because they’ve vowed to meet any financial need with grants and scholarships, it could still be a great option for families who might not have traditionally thought they could afford it.”
Farrington pointed out that because these colleges have no loan policies, they get a lot of applications, are very selective, and the admission rate is much lower than at other schools.
Also, personal finances are not covered by the no-loan policies.
Farrington said, on average, families still end up with about $9,000 in student loan debt, which is still lower than the national average.
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