ST. LOUIS — Washington University plans to join a list of elite campuses that have eliminated federal student loans from their financial aid packages.
Starting next year, students who qualify for financial aid will receive scholarships and grants from Washington U. in place of loans. About 16% of the university’s 7,700 undergraduate students take out federal loans and graduate with a median $17,500 in debt, according to the U.S. Department of Education.
“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,” said Chancellor Andrew Martin in a statement.
In 2001, Princeton University became the first in the country to remove loans from financial aid packages, followed by other Ivy League institutions. The dozen other universities with no-loan policies tend to be highly selective with large endowments.
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The average borrower in the U.S. has more than $40,000 in student loan debt, according to the nonprofit Education Data Initiative.
Student debt is expected to be a hot-button topic in the 2024 presidential election. Federal loan payments will resume next month after a lengthy pause during the pandemic. And a relief plan from the Biden administration, which would forgive up to $20,000 in loans, was rejected in June by the U.S. Supreme Court.
At the same time, colleges have been competing for a shrinking number of students as enrollment continues to trend downward. Over the past few years, Washington U. has become known for one of the most generous financial aid programs in the country.
In fall of 2020, the university started offering full rides to any student from Missouri or southern Illinois whose family income is under $75,000.
The WashU Pledge covers the costs of tuition, room and board and fees for applicants who meet the financial requirements and are admitted as full-time undergraduates. About 5% of incoming freshmen have received the Pledge award, including 98 this school year.
When it was launched, Chancellor Martin said the program was part of “being a good neighbor” to St. Louis.
“I wasn’t even able to consider WashU until I heard about the Pledge program,” said Elise Thompkins, a senior majoring in psychological and brain sciences. “It has made the college experience much less stressful and more accessible.”
Thompkins, who graduated from Pattonville High School, is taking graduate courses in occupational therapy, which are also covered by the scholarship.
“My plan was not to stay in St. Louis whatsoever, but here I am staying for college and grad school,” Thompkins said. “That’s really just because I couldn’t pass up such an amazing opportunity as a WashU education.”
The university moved to need-blind admissions in 2022, meaning an applicant’s ability to pay is no longer a factor in undergraduate admissions decisions.
That program, called Gateway to Success, invested $1 billion in financial aid after the university’s endowment earned a record 65% return in fiscal 2021 to reach $15.3 billion. The endowment dropped to $12.3 billion last year, still placing it among the top 15 in the country.
The sticker price for undergraduate tuition, room and board at Washington U. this school year is about $84,000. The average student receiving financial aid pays $27,595, according to federal data.
The university received national media coverage in 2014 for its lack of economic diversity, then enrolling the fewest number of underprivileged students among elite institutions. In the last decade, the university has increased the number of low-income students who qualify for federal Pell grants from 5% to 21% of the total enrollment.
Schools like Washington U. should meet a goal of 20% low-income students in part to justify their tax-exempt status, according to researchers at the Pell Institute for the Study of Opportunity in Higher Education.
Washington University professor Philip Dybvig was among three economists awarded a Nobel Prize on Monday, Oct. 10, 2022.
