Washington University (WashU) in St. Louis has updated their financial aid policy to no longer issue federal student loans starting in the fall of 2024. Instead they will be issuing grants and scholarships in a new loan-free program.
“We want to get them here, support them during their time here, and prepare them to do great things. Now, when they graduate from WashU, they will do so debt-free,” Andrew Martin, Chancellor of WashU, said in a statement.
In a growing trend among more than 20 elite colleges across the country, loans are becoming a thing of the past. This is great news for the students of these colleges who will receive an affordable education if they qualify. But, this opportunity is only offered by non-profit institutions with large endowments. Some of the other colleges that have joined the ranks of debt-free financial aid programs are Princeton, MIT, Pomona, Wesleyan and others.
According to the Education Data Initiative, the average student owes $37,338 in student loans and the average private institution student owes $54,921 in student loans in 2023.
In a time when student loans have increased exponentially, this possibility of a debt-free education is exciting.
Student loan debt is a polarizing issue that has plagued America for the last 30 years, with federal student loans now considered a “debt trap” as tuitions rise 134%, according to U.S. News Data.
Institutions like WashU offering debt free education is a step in the right direction for elite institutions, but for the rest of the colleges in America such as Truman State and UMSL, another solution is required.
The only reason these elite institutions are able to offer debt-free education is because their endowments are astronomically higher than others in the country. An endowment consists of the total amount of donations and assets to a college from organizations or individuals.
According to Bloomberg, WashU’s endowment was $15.3 billion for the year in 2021. The endowment of Missouri State Univeristy was $193 million in 2021, and average debt of Missouri State is $22,412, according to the U.S. News & World Report.
WashU’s total enrollment in 2023 was 15,484 while Missouri State’s enrollment in 2022 was 24,978 students. There is an unequal distribution of endowment per student, and that is the reason that elite institutions are able to create loan-free education programs.
Other solutions, like government re-budgeting and school re-budgeting, are required for the rest of the colleges in America to offer debt-free education.
There have been attempts to address indebtedness like through President Biden’s 2022 plan to provide $20,000 in student loan relief, but that was struck down by the Supreme Court.
Debt-forgiveness programs like WashU’s and Public Service Loan Forgiveness may help a little, but more is needed to ensure that all students have access to a debt-free education.
Tuitions are still sky-high, and debt will continue. While elite institutions have started figuring out loan-free programs, we must ensure other schools in America exist in the minds of both the population and lawmakers.
