10 Great Colleges That Won't Make Students Take Loans

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published 22 December 2017

The schools on our list of best college values have earned high grades for generous financial aid awards, which reduce the amount students must borrow to pay the bills. But some schools go even further, eliminating loans from their financial aid packages.

The number of schools that have no-loan policies, whereby scholarships and grants replace loans in their financial aid packages, has increased from just a handful of schools over a decade ago to 70. Some colleges limit no-loan packages to students whose family income falls below a certain level (such as $60,000 a year), while others have cut out loans for all students who are eligible for financial aid.

The programs don't necessarily eliminate all loans. Even at schools where borrowing isn't part of the deal, a student's financial aid package is based on what the school estimates a student's family can afford to pay. Some families can't or choose not to pay the full amount, which means students may have to borrow to make up the difference. And some students borrow to pay for things that aren't included in the budget covered by their financial aid package or to avoid having to take an on-campus or summer job.

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1. Princeton University

Location: Princeton, N.J.
Total annual cost: $61,140
Average need-based aid: $47,497
Total net cost: $13,643
Kiplinger's combined rank: #1
Students with loans: 18%

Its long-heralded academics, combined with generous financial aid, secure Princeton's first-place finish on our combined list (it also nabs the top spot on our list of private universities for the fourth time in a row). Princeton accepts only 7% of applicants and boasts a five-to-one student-faculty ratio. The average need-based aid award of nearly $47,500 cuts the school's annual sticker price by 78%.

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2. Davidson College

Location: Davidson, N.C.
Total annual cost: $64,903
Average need-based aid: $41,998
Total net cost: $22,905
Kiplinger's combined rank: #2
Students with loans: 26%

While Davidson's endowment is considerably smaller than that of the Ivy League schools with no-loan programs, the school meets 100% of each student's demonstrated financial need through scholarships, grants and campus jobs. Nearly half of Davidson students receive need-based financial aid, and the average award for students who qualify cuts the school's sticker price by 65%. Only 26% of students take loans, and the average debt at graduation among those who borrow is about $12,000 less than the national average for students who attend private colleges.

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3. Swarthmore College

Location: Swarthmore, Pa.
Total annual cost: $67,110
Average need-based aid: $45,536
Total net cost: $21,574
Kiplinger's combined rank: #3
Students with loans: 31%

Swarthmore's 425-acre campus, located just 11 miles southwest of Philadelphia, attracts academically gifted students. The school accepts just 13% of applicants; 61% of incoming freshmen score 700 or higher on the critical-reading portion of the SAT, and 63% score top marks on the math section. The small liberal arts college's no-loan financial aid awards reduce the average cost of attendance for those who qualify to one-third of the sticker price. The average debt of students who do borrow is 28% less than the national average for students who attend private colleges.

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4. Harvard University

Location: Cambridge, Mass.
Total annual cost: $66,609
Average need-based aid: $48,598
Total net cost: $18,011
Kiplinger's combined rank: #4
Students with loans: 23%

The country's oldest institution of higher learning has been awarding financial aid to students since shortly after its 1636 founding. In 2007, Harvard sweetened the deal by taking loans off the table and replacing them with grants. But competition for admission to this Ivy League institution is fierce. Harvard's ultra-competitive 5% admission rate ties only with Stanford University's as the most competitive of all 300 schools in our rankings.

Families of admitted students won't have to drain the coffers to cover their portion of the bill. The school generally expects families with an annual income of between $65,000 and $150,000 to contribute no more than 10% of their income. The school meets 100% of students' demonstrated financial need and awards need-based aid to 55% of students. The average need-based aid award cuts the school's annual sticker price by 73%, making a Harvard education surprisingly affordable. More than three-fourths of families avoid borrowing—and the average debt at graduation for students who do borrow is about half of the national average for private school students.

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5. Pomona College

Location: Claremont, Calif.
Total annual cost: $68,125
Average need-based aid: $46,039
Total net cost: $22,086
Kiplinger's combined rank: #6
Students with loans: 36%

This small liberal arts college in southern California makes the top 10 of our combined rankings for its stellar academics and generous financial aid awards, which do not include loans. The average need-based aid award is roughly $46,000, which cuts the school's sticker price by 68%. About one-third of students borrow, but the average debt at graduation of $18,738 is just over half the national average among private school borrowers.

Pomona's idyllic campus, located within an hour's drive of Los Angeles, attracts students from around the country for its broad liberal arts curriculum. Students can select from about 600 classes (or nearly 2,700 through Pomona's partnership with other colleges in the Claremont consortium) in 48 majors in the arts, humanities, social sciences and natural sciences. The school's 92% four-year graduation rate—the highest on our list of 300 colleges—keeps most families from having to fork out money (or borrow) for an extra year.

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6. Vanderbilt University

Location: Nashville, Tenn.
Total annual cost: $64,542
Average need-based aid: $41,331
Total net cost: $23,211
Kiplinger's combined rank: #7
Students with loans: 21%

Vanderbilt eliminated loans from students' financial aid packages in 2009. The school's $4.10 billion endowment helps Vanderbilt meet 100% of students' demonstrated financial need. Nearly half of students qualify for need-based aid, and the average award of more than $41,000 slashes 64% from the school's sticker price. Vandy also awards non-need-based aid to 21% of students who don't receive need-based financial aid. The average debt at graduation among the roughly one-fifth of students who do borrow is $24,122.

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7. Washington and Lee University

Location: Lexington, Va.
Total annual cost: $63,880
Average need-based aid: $42,292
Total net cost: $21,588
Kiplinger's combined rank: #9
Students with loans: 33%

Washington and Lee's bucolic campus, known for a student-run honor system and the "speaking tradition" of saying "hello" to fellow classmates, has attracted students throughout the country seeking a quality liberal arts education in an atmosphere of civility and respect. With an intellectual student body (88% scored in the top tier of the ACT), a competitive admission rate of 24% and a student-to-faculty ratio of eight-to-one, it's no surprise that this Mid Atlantic university makes our overall top 10 list for quality education and affordability. In fact, 95% of first-year students return to W&L for their sophomore year and 88% graduate in four years.

The school's motto, "Non Incautus Futuri," stresses a mindfulness toward the future, but W&L is also mindful of providing an affordable education for all its students. The school provides a combination of university, federal and state grants and a $2,000 work-study award to its students. Only one-third of undergraduates borrow. The average need-based aid of nearly $42,500 enables undergrads to save an average of 66% off the sticker price, making it one of the most affordable liberal arts colleges in the Mid Atlantic. Although the average debt at graduation among students who do borrow is more than $26,000, an average of 67% of students graduate debt-free.

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8. Yale University

Location: New Haven, Conn.
Total annual cost: $70,570
Average need-based aid: $50,565
Total net cost: $20,005
Kiplinger's combined rank: #13
Students with loans: 14%

Yale's respectable academics and generous financial aid programs help this Ivy secure its spot at #13 on our best college values list. The school's $27.2 billion endowment allows it to meet 100% of financial aid for students who qualify, without including loans in financial aid packages. And Yale's definition of financial need is broader than you might expect. Families with an annual income of $200,000 or more may still qualify for some financial help. Half of students receive need-based aid—the only kind that Yale offers—and the average award cuts the school's annual sticker price by 72%.

The trick, however, is getting in. The school's 6% acceptance rate is among the most competitive of all of the schools in our rankings. Among incoming freshmen, 80% score 700 or higher on the critical-reading portion of the SAT, and 81% do just as well on the math section. And 69% of students who are offered admission enroll. Once on campus, Yalies can choose from among roughly 2,000 courses each year in more than 100 academic departments and programs.

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9. Amherst College

Location: Amherst, Mass.
Total annual cost: $69,500
Average need-based aid: $50,380
Total net cost: $19,120
Kiplinger's combined rank: #19
Students with loans: 22%

Located on 1,000 acres in the heart of Massachusetts's Pioneer Valley, Amherst College attracts academically gifted students. More than two-thirds of incoming freshmen score 700 or higher on the critical-reading portion of the SAT, and 67% score top marks on the math section. The school's 14% admission rate ties with Pitzer College as the fifth-most-competitive liberal arts college on our list. Students can choose from more than 850 courses on campus or more than 6,000 offered through Amherst's partnership with Hampshire College, Mount Holyoke College (#69 on our combined list), Smith College (#37) and the University of Massachusetts Amherst (#178).

Amherst eliminated loans from students' financial aid packages in 2008, replacing them with scholarships and grants. Last year, the school awarded more than $50 million in financial aid to nearly 60% of its students. The average need-based-aid award of more than $50,000 cuts the school's annual sticker price by 72%. Fewer than one-fourth of students borrow, and the average debt at graduation among those who do borrow is $18,662, just over half of the national average for private school borrowers.

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10. Bowdoin College

Location: Brunswick, Maine
Total annual cost: $66,820
Average need-based aid: $42,206
Total net cost: $24,614
Kiplinger's combined rank: #23
Students with loans: 27%

Nestled between the mountains and the coast of Maine, this quaint liberal arts college is home to about 1,800 students. Bowdoin accepts 15% of applicants, and nearly half of those who are accepted choose to enroll. Need-based aid awards slash the school's annual sticker price by 63% for students who qualify. And students who attend Bowdoin, whose mascot is a polar bear, won't have to take the plunge when it comes to student loans. The school eliminated loans from its financial aid packages in 2008, replacing them with scholarships and grants.

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Wojno was formerly research director for data-intensive projects such as Kiplinger's college and mutual fund rankings. He has worked as a newswire reporter and newsletter editor for Dow Jones, covering convertible bonds, REITs and mutual funds. He also served as market research manager for Keane Federal Systems, an IT consultancy. He received a BA in communications and computer science as well as a MBA from George Washington University.