As part of a growing trend in financial assistance, schools like Amherst College are using portions of their annual endowments to help students get through college without having to repay any loans.
"We were the first to go with dropping loans in '99," said Joe Paul Case, director of financial aid at Amherst College. "We're very fortunate to have the resources to devote to this."
Amherst College, which is a private higher-education institution, used 4.6 percent of its endowment last year to remove loans from accepted applicants whose family incomes total below $50,000 per year.
The reasons for this include the need to counteract both rising inflation rates and the increasing costs of higher education, not to mention an interest in helping students bear the burdens of credit damages later on in their lives.
"Let's say you have to borrow $5,000 in alternative loans each year," continued Case, referring to outside loans not offered through federal programs. "It's probably going to grow to $6,000 by the end of that year, and the interest rates themselves are subject to change over time."
"You'll probably be paying that off for the next 10 years," said Case.
An important question is whether or not public universities in Massachusetts will be able to follow suit.
"Public school bills in New England are based primarily on substantial fees," said Case. "The pressure is on state legislature to step up to the plate and provide proper appropriations."
Representatives from Governor Deval Patrick's press office could not be reached in time for comment.
Columbia University in New York is one of the private schools which adopted the student debt assistance program last year. It was in part due to a donation of $400 million from John Kluge, an alumnus of the university. It was the largest donation exclusive to student aid in history.
"I'm still working with about the same amount of funds on a day to day level," said Columbia sophomore Grace Duffy. "But in terms of my future, this means I'll be able to graduate completely free from loans, which is amazing."
This program opens up more possibilities for university students, because of the financial freedom it allows.
"I feel free to pursue something I'm really interested in even though it's not really financially viable immediately after graduating," Duffy said, referring to her concentration of study in art history.
"I decided my major after hearing about this program," she said.
Other state and public colleges and universities have been coming forward with similar efforts across the country. Schools like the University of Virginia, University of North Carolina, and the University of Maryland have adopted similar programs intended to eradicate the potential loans for lower income students at their own schools.
If other public universities are capable of getting rid of loans for students with lower-income families, then the University of Massachusetts might soon be right behind. Students are typically given financial aid packages which reflect their degree of financial need.
According to the Federal Financial Aid Web site, each FAFSA report calculates the student's "expected family contribution," or "EFC." That amount is then subtracted from the bill the university gives each student, giving an estimation of what the student needs. After that, a financial assistance package is assembled from loans, grants, and a student job-if applicable.
If the student's financial aid at schools like Columbia and Amherst totals less than $50,000, then the loans are paid for through the university endowment and other short-term sources.
"It's a significant extension for students with families in need," said Case. "I'm hoping [students] will feel freer to apply here, and that it will take off at more public universities."
Devon Courtney can be reached at dcourtne@student.umass.edu.
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