Washington University launches a ‘no-loan’ program to combat student debt
Next year, students admitted to Washington University in St. Louis will not have to rely on student loans, the college announced in a news release Friday.
Students who make it into the private school and receive need-based loans after completing a FAFSA application will then get the amount of the loans replaced with grants and scholarships.
The school’s announcement comes as, nationally, borrowers look at federal actions to dissolve a portion of student debt.
“We have worked hard to make good on our promise to remove financial barriers for all admitted undergraduate students, regardless of their socioeconomic backgrounds,” Washington University Chancellor Andrew D. Martin said in the announcement. “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.”
The university’s “no-loan” policy, beginning fall of 2024, is for students who demonstrate financial need, Washington University’s website says.
The program follows the college’s 2021 switch to “need-blind” undergraduate admissions, which removes a student’s finances from admission decisions, and the launch of the WashU Pledge in fall of 2020.
The WashU Pledge provides tuition, room, board and fees to students from Missouri and parts of Illinois.
Washington University said its recent efforts, like the WashU Pledge, have increased its portion of Pell-Grant-eligible students from 5% of its admitted students a decade ago to 21% of the incoming freshmen this year.
The university estimates its yearly cost of attendance, including books and fees, at almost $88,500.
“If we truly want our students to thrive academically and personally, we can’t expect them to carry the weight of student debt,” Martin said. “No one should have to borrow money to obtain an undergraduate degree, and moving forward here at WashU, they won’t.”
There are 784,900 Missourians with federal student loans, according to Office of Federal Student Aid data, with a total balance of $27.1 billion as of June 2023.
And the cost of an education continues to escalate.
Nationally, tuition costs increased at an average of 3.4% between the 2019-20 school year and the 2021-22 academic year, according to the U.S. Department of Education’s National Center for Education Statistics.
The federal government had a plan to relieve $10,000 to $20,000 of student debt per borrower under the HEROES Act before being shot down in court earlier this year. Missouri student loan servicer MOHELA was named in the litigation and a part of the Department of Education’s defeat, although the company was not a participant in the lawsuit itself.
Federal officials have proposed a “plan B” to the original plan to relieve debtors of some of their loans and have launched the Saving on a Valuable Education (SAVE) Plan.
The SAVE Plan, an alternative to income-driven repayment plans, pauses payments for those who make under $15 an hour and reduces payments for those making above that threshold.
Over 82,000 Missourians are currently enrolled in the SAVE Plan.