Debt-Free College? Yes, It Exists
At first glance, Davidson College, a leafy, suburban liberal arts campus outside of Charlotte, N.C. isn’t much different than its contemporaries elsewhere in the country: Between classes, students laze under trees in Adirondack chairs with open books and crisscross the quad in loud gaggles, waving to people they recognize.
Stately 19th century buildings, relics of the college’s 1837 beginning, sit side by side with newer additions, like the multi-million dollar, newly renovated student union. But talking to students about their experience at the college exposes the Davidson difference: The students’ sentences are punctuated with words like “thankful,” “blessed,” “lucky,” and “relieved.”
The reason for this might have something to do with the fact that while the country’s higher education system is plagued by the student debt crisis, Davidson has instituted a need-blind, “no loan” policy — the college will meet 100 percent of students’ demonstrated need with grants and work-study programs, eliminating or dramatically decreasing the debt that students graduate with. (Read More: Paying for College: The Gift of Giving (Tax-Free).)
The “no loans” policy is a result of the Davidson Trust, an initiative started by the schools’ trustees in 2007 when they saw they were losing the competition for talent with other highly selective colleges and universities.
“Students that didn’t believe they could afford us wouldn’t even look," Chris Gruber, Davidson’s vice president and dean of admission and financial aid, told CNBC. "Price sensitivity took place at the time of application, not once they had been offered admission. So that was the driving force for us to say, we really need to do something,”
With a price tag of $52,000 for total cost of attendance, Davidson College is hardly cheap. Despite a relatively modest endowment ($511 million in fiscal year 2011), since the Trust’s inception, the college has been able to raise enough money — through donors, alumni, and the students themselves — to supply grants in financial aid packages for all demonstrated need.
“We will never package a student loan,” Gruber said.
Eileen Klaiklung, a senior at Davidson studying Sociology, found out after her acceptance that she would be one of the many beneficiaries of the Davidson Trust.
“I was stunned — I was speechless when they told me,” Klaiklung said in an interview with CNBC. “My mom started crying in the admissions office. I was in big shock when she started crying because I didn’t realize how much pressure it did put on her. And I’m an only child, and her biggest dream was for me to go to college and do something with my life.”
It was just last year that the Wall Street Journal heralded the Class of 2011 as the “Most Indebted Ever,” and student loan debt now exceeds credit card debt. College costs continue to rise at more than twice the rate of general inflation, and this year student loan debt exceeded $1 trillion. (Read More: Student Debt: America's $1 Trillion Time Bomb.)
Some schools have begun to recognize that changes need to be made. Since 2001, Princeton has been offering aid recipients financial aid packages that replace loans with grants; Dartmouth College has instituted a policy that families with a total income of less than $100,000 per year will be awarded a scholarship that covers the full costs of tuition.
But with student debt continuing to rise and student protests regarding the issue becoming more and more common, it appears programs like these are hardly pervasive. Davidson senior J.D. Merrill helps to raise money for the Trust, and said this sort of initiative doesn’t need to be unique to Davidson. (Read More: Student Loan Crisis Busts Retirement Savings.)
“This could be possible anywhere," he said. "Students at any school could be taking the responsibility on themselves, saying, we want our college to take on this type of commitment, and we’re gonna take the lead in fundraising for it.”
Davidson President Carol Quillen is a relative newcomer to the college, becoming the 18th President of Davidson in 2011 after a long tenure at Rice University in Texas. Quillen lives in a stately Georgian house on the campus, and as she strolls toward the student union she addresses individual students by name, stopping to ask them about their student activities or their hometowns. And though relatively new, Quillen is clearly passionate about Davidson’s financial aid program.
“The wealth of your parents should not dictate your opportunities in life. And we would be doing a disservice to this country and the amazing young people in it if we didn’t make Davidson available to all of them, independent of their financial circumstances,” Quillen said in an interview with CNBC.
In the current financial climate, many Davidson students are just glad they get to start their post-college lives without debt.
“I know a lot of my friends who go to other schools are constantly telling me about their loans, and how they’re stressed out, and how they need to start getting a job that pays really well right away,” Klaiklung said. “And that’s all that they’re thinking about right now, and I don’t know how that feels; and I feel incredibly lucky, to be honest. It feels awesome.”
—By CNBC's Catherine Corrigan
This blog post is part of NBC News’ Education Nationinitiative, engaging the country in a solutions-focused conversation about the state of education in America.
Sector Watch - Education and Training Services:
- Corinthian Colleges Inc.
- DeVry, Inc.
- ITT Educational Services Inc.
- Apollo Group Inc.
- School Specialty Inc.
- Scholastic Corp
- Capella Education Company
- Career Education Corp.
- Strayer Education Inc
- Education Management Corp