Study: 'No Loans' Polices Have Helped Low-Income Students

August 23, 2012

"No loans" policies -- in which students with family incomes below certain levels receive grants in place of loans --have resulted in colleges that adopted them seeing gains in the percentage of students eligible for Pell Grants, says a report being released today by the Institute for Higher Education Policy. Private institutions saw a 1.7 percentage point average gain in Pell-eligible students, while publics saw a 1.3 percentage point increase. While the report praises these programs, it also identifies dangers in them. "When well-publicized, these programs have the potential to generate greater interest among high-achieving low-income students," the report says. "When this occurs, enrollment management professionals may be tempted to use these aid programs as a marketing strategy that simply drums up interest among the highest-achieving low-income students. As a result of this increased demand, opportunistic colleges may try to 'skim' the top low-income students without actually changing the total proportion of low-income students on campus."

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