Education
Debt eraser. Photo - Flickr/Images of Money. Debt eraser. Photo - Flickr/Images of Money.  

At elite colleges, the rich stay rich [SLIDESHOW]

Shopping for the right college is a bit like shopping for carpets in the depths of a souk in Marrakesh. Only a sucker would dream of paying the full sticker price. However, getting to the actual price you’ll pay involves an elaborate, unavoidable, grossly inefficient dance. In Marrakesh, the dance is bargaining; at American colleges, it’s mostly filling out a bunch of forms.

There is some good news, though. If you or your kids happen to have exceptional academic credentials, a handful of the most illustrious colleges and universities in the country have eliminated loans (at least to some extent).

These schools have replaced loans with grants that never need to be repaid, thus reducing student debt considerably — often down to zero. On-campus jobs, summer savings and, especially, endowments bigger than the GDPs of some countries, make up the difference.

You’ll still owe your Expected Family Contribution, of course. But you’ll owe that anyway, whether you go to a prestigious liberal arts college or the nearest state university. The difference is that most schools — public and private — will gladly make student loans and parent loans part of your financial aid package.

Check out the schools in the slideshow below, and good luck getting admitted (because you’ll probably need it).

Click an image below for larger version.
  • The average aid package for students at Princeton University is currently $39,700, 95 percent of which is free money with no strings attached. Students earn the rest by working part-time. Most students from families with incomes less than $60,000 pay nothing to attend.
  • In 2012-13, over 60 percent of the students at Harvard University received a chunk of the school’s $172 million or so in purely need-based financial aid. Harvard doesn’t do loans. It also doesn’t include home equity when it defines your family’s contribution. Also, over 2/3 of the students who receive need-based aid come from families with incomes greater than $60,000.
  • At Yale University, financial aid packages meet 100 percent of each student’s demonstrated need through grants and on-campus employment (at an excessive $12 per hour). Most students from families with incomes less than $65,000 attend Yale for free. Between $65,000 and $200,000, you owe on a sliding scale that begins at 1 percent of family income. At $200,000, it’s 20 percent.
  • Davidson College meets 100 percent of each student’s calculated financial need -- at least as defined by Davidson -- through grants, merit-based scholarships and student employment. You might choose to take out a loan anyway, but it won’t be part of your aid package. Photo - Facebook/Davidson College.
  • Like the other schools on this list, Amherst College is able to offer every dollar of generous financial aid without resorting to loans. Most students are able to graduate with no debt. Amherst typically expects first-year students to contribute $1,600 from summer employment ($2,000 each year for older students).
  • Since 2008, Claremont McKenna College has boasted a no-packaged loan policy. That means the same thing it means at all the other schools on this list: free money and no loans, at least as far as demonstrated financial need is concerned. Aid packages typically include a work-study component.
  • This academic year marks the fifth that Pomona College hasn’t utilized loans as part of need-based student aid (though many students and their families will borrow anyway to cover the expected family contribution). Students are expected to kick in a minimum of $2,300 by working on campus.
  • Starting with the Class of 2012 and continuing at least through the Class of 2017, Haverford College says it has eliminated loans as part of aid packages. Loans are still available, but Haverford meets 100 percent of each student’s demonstrated need with grants and work-study.
  • There are loans at Dartmouth College, but not for most students from families with total incomes less than $100,000. The average grant of free money for this year’s batch of sophomores at Dartmouth is just over $38,000.
  • The University of Chicago, much like Dartmouth, has loans, but not for students from families with incomes less than $75,000 a year. Also, some 2/3 of University of Chicago undergrads leave campus with their diplomas and no debt.

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