Grant me a debt-free wish

The University of Chicago recently announced the funding of a new No Barriers program aimed at ending student loans for undergraduates. This announcement comes as part of a larger trend: leading universities opting to replace student loans with grants. Duke is now one of only two universities ranked in the U.S News and World Report top 10 that maintains a student loan policy. By including loans in financial aid packages, Duke is placing a costly burden on the shoulders of its students while also potentially harming its own long-term prospects.

The effects of college debt on students are numerous and often damaging. With the average Duke student graduating $19,000 in the red, students may be forced to prioritize earning money immediately upon graduating college. This can exacerbate the trend of students opting for pre-professional tracks, an issue the Board has discussed in the past. With so hefty a financial burden, working at a non-profit or taking time to explore other uncommon options do not seem to be reasonable options, as interest will quickly begin to add up. College debt can thus distract from the intellectual pursuits that students might otherwise be able to engage.

If loans pressure students to follow lucrative tracks, then they may also burden students with additional stress about the debt they are accruing. For 18- to 22 year-old students who have little exposure to personal finance, loans may seem to be a looming, enigmatic weight that serves no purpose but to create uncertainty about life after graduation. In this way, loans serve as a distraction from the priorities that the University desires students to have.

Duke should thus follow its peers in offering students grants rather than loans in its financial aid system. The elimination of loans could yield both short-term and long-term benefits for the University. On one hand, students receiving aid through grants rather than loans attached to ever-accruing debt would feel a sense of gratitude toward Duke. Such appreciation not only incentivizes students to maximize their potential and take advantage of diverse opportunities during their time at Duke, but it also encourages them to give back as alumni. Furthermore, if Duke hopes to compete for the top applicants across the country, it must offer financial aid packages that are comparable to its peer institutions. While some top universities with far larger endowments may offer more comprehensive aid packages, transitioning to a loan-free system would help Duke to close the comparative gap and thus attract top students. Increasing the financial feasibility of attending Duke would also broaden the pool of applicants, reaching less affluent students that are currently underrepresented. Opting into a grant-based model rather than a student loans system would thus not only have the potential to increase the quality of the student body, but also to increase socioeconomic diversity on campus.

We understand that tuition pays for a significant portion of Duke’s operating costs, making the elimination of loans a difficult subject. Money cannot be produced from nowhere, and a policy change would surely involve difficult spending decisions. Nonetheless, we urge the administration to prioritize exploration into a no-loan policy, as the many benefits of eliminating loans are enough to warrant such discussion.