Courtesy of msn money
Dozens of universities are replacing loans with grants for low-income students. But there's more work to do by other schools, Congress and families.
By Liz Pulliam Weston
After two decades of rising costs and declining grants, something good has finally happened with college financial aid.
More than 50 universities -- many of them elite, most with fat endowment funds -- have eliminated loans for low-income students while increasing other financial aid programs. Some have replaced loans with grants in all their aid packages. A few have waived tuition or capped how much families have to contribute, even when household incomes are substantial.
At Harvard, for instance, families with incomes up to $180,000 will have to pay no more than 10% of their incomes toward the cost of school. Yale extended the same policy to families with incomes up to $200,000.
At both schools, the "expected family contribution" is reduced to zero for families with incomes below $60,000. (You can see more details of the various programs at FinAid.org.)
"There are some families that will pay less for their kid to go an Ivy League school than they would if their kid went to a state school," said financial aid expert Mark Kantrowitz of FinAid.org.
The no-loan movement is a huge step forward for poor and working-class families who want their kids to get a decent education but are scared away by the debt they'd have to incur.
"Even though the students may know intellectually they'll be able to pay the money back" with their enhanced earning power, Kantrowitz said, "emotionally, it has a chilling effect."
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