University announces new ‘no loan’ policy to be implemented next fall
Washington University announced on Friday that they will adopt a “no loan” policy for all undergraduates starting fall of 2024. The policy promises to eliminate federal loans from financial aid packages, allowing students to graduate without debt.
In a statement, Chancellor Andrew Martin said the University is committed to financial accessibility.
“We have worked hard to make good on our promise to remove financial barriers for all admitted undergraduate students, regardless of their socioeconomic backgrounds,” Martin wrote. “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.”
Data from Student Financial Services tracked that 25% of students who graduated in the class of 2020-2021 did so with an average debt of $22,740.
Mike Runiewicz, Director of Student Financial Services, said that the new policy will likely be most impactful to families whose income is between $75,000 and $200,000 dollars annually, but that it could expand even further.
“Even families who make more than $200,000 of income may qualify for need-based financial assistance because the cost of attending WashU is pretty high,” Runiewicz said.
The current annual tuition for full-time undergraduates is $61,750, with the total estimate of University charges given average meal and housing plans coming to $83,760.
When senior Sam Schwartz applied to college, he found that many of the schools he was interested in had similar tuition to WashU. In the end, WashU gave him the best financial aid package “by a wide margin,” a critical factor in his decision to attend.
His package included $3,500 to $7,500 of federal loans. “Those federal loans, they seem like a really small part of the package… But it adds up quickly,” Schwartz said.
Schwartz also took out private loans in order to help with room and board costs throughout college, which he described as “much less friendly” in terms of interest rate than federal loans.
Now, months away from graduating, Schwartz will have to pay back $27,250 of federal debt.
“It’s definitely a bit foreboding,” he said.
While Schwartz will graduate before the new plan takes effect, he says his initial reaction to the University’s announcement was positive. But he also wondered about what else might have to happen behind-the-scenes in order to fulfill the no-loan policy.
“It’s kind of a black box of how [colleges] calculate what ‘need’ is,” Schwartz said. “I’m nervous that they could give a smaller package just without federal loans.”
Runiewicz said that the University’s ‘need’ calculation will stay the same despite the no-loan policy.
“There are [annual] changes to the financial aid formula, but any changes to the financial aid formula will be advantageous to students this year,” he said. “This is truly dollar for dollar additional scholarship and grant.”
Runiewicz also said that the estimated cost to the University in order to eliminate loans from aid packages will be about eight million dollars. To his knowledge, the finance department is still putting together pieces of funding to meet that goal.
Despite the policy’s name, Runiewicz said that some families may still choose to take out private loans in order to cover the costs of a Washington University education.
“Students might borrow for several reasons,” Runiewicz said. “Maybe a family wants to borrow so they have to pay less out of pocket this year.”
Runiewicz, who has overseen Student Financial Services for over a decade, is thrilled with the new policy.
“I’ve had lots of great days at WashU being in the financial aid office …but when that article came out announcing no loans, it was the greatest WashU day,” he said.