Getting a Loan Without Loan Payments

By Steven Muller

For all the scare stories this spring about how hard it was going to be for students to get loans, the loan season is ending quietly with money secured. But I have a different take on this story. Why are we glad that students and parents find it so easy to get further into hock? Students who borrow are graduating with a median $20,000 in education debt that schools know about (that doesn't count direct loans from other places where students borrow, like banks). Kids have no idea how tough it could be to repay or what might happen if they can't (for some horror stories, see studentloanjustice.org). Families starting to think about college should troll for places they can afford, while borrowing as little money as possible.

The colleges themselves know that loans are getting a bad name. Sixteen high-cost schools— including Amherst, Haverford, Lafayette, Oberlin and Stanford—provide financial aid entirely in the form of free grants, even to students with higher incomes. An additional 28 schools have adopted no-loan policies within certain loan or family-income limits.

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