Wall Street Journal: Some Colleges Cut, Eliminate Student Debt

Submitted by Caroline J. Hanna
Amherst President Anthony W. Marx discussed the college's decision to replace all loans with scholarships in a Nov. 29 Wall Street Journal story. Also featured in the piece was Jessica Mestre '10, who told the newspaper that the new policy enabled to look at her future a little differently: "I don't know my major or my career plans yet, but this relieves the pressure."

Self-Help: Student Loans

Amherst College has replaced the loan component of all financial aid awards with scholarship aid.  This loan elimination represents a huge financial commitment by the College and is expected to aid middle income families applying to Amherst.

Students may still choose to borrow a student loan to purchase a computer, replace an expected summer savings shortfall, or replace work in the financial aid package.

Self-Help: Student Loans

Amherst College financial aid packages do not include student loans to meet demonstrated financial need. Students may still decide to borrow to purchase a computer, replace the student income contribution, replace work in the financial aid package, or as a family financing option. All student loan programs provide for long-term repayment at moderate interest rates. The repayment period may be as long as ten years and a monthly minimum payment is required. Repayment of principal is not required while a student is enrolled at Amherst or another recognized post secondary institution.

Monthly Payment Plan

This plan is sponsored by the College and administered by Tuition Management Systems (TMS). Through the plan, a student's semester charges may be paid in five installments beginning in June for the fall term and beginning in November for the spring term. Those starting the plan after June 15 for the fall semester, or after November 15 for the spring semester must include back payments with the application.

There is a $35 per semester non-refundable application fee; there is no finance or interest charge.

Alternative Student Loans

Many different lenders are offering alternative loans, and one should consider applying for a private, alternative educational loan only after exhausting all other possible sources of funds. Each loan is different, so you should become familiar with the criteria, benefits, fees, and the margins above the index. If possible, the student should apply with a parent as a co-borrower; the co-borrower may reduce applicable fees and will lower your interest rate.