I'm happy to hear University of Notre Dame will no longer consider a family's financial situation when determining an admissions decision.
But I'm disappointed that they have jumped on the misleading "no-loan" messaging.
The Myth of No-Loan Financial Aid Packages: What Families Need to Know
As college costs continue to rise, some institutions have started offering so-called "no-loan" financial aid packages to attract students. On the surface, these offers seem like a dream come true. However, the reality behind these packages can be more complicated, and in many cases, families still find themselves needing to borrow to cover the cost of education. Let’s break down how this marketing strategy works and why it can be misleading.
What is a "No-Loan" Financial Aid Package?
When a college advertises a "no-loan" financial aid package, it is essentially promising that the aid it offers will not include federal or institutional loans. Instead, the financial aid will be made up of grants, scholarships, and possibly work-study opportunities. The idea is to eliminate the need for students to take on federal student loans as part of their financial aid package.
This sounds like a win-win: students get financial assistance, and there are no loans to repay after graduation. However, the promise of "no loans" doesn’t necessarily mean that college will be affordable for everyone.
The Hidden Catch: The Family’s Contribution
One of the most significant ways "no-loan" packages can be misleading is through the concept of the family’s calculated contribution to college, now referred to as the Student Aid Index (SAI). Even though the student won't be offered loans in their aid package, the college still calculates how much they expect the family to contribute toward the total cost of attendance. Because this calculation does not factor in a family’s living expenses, this SAI figure will be far more than what families are realistically able to pay.
For instance, a family might receive a financial aid package that covers tuition but still be expected to contribute $20,000 per year toward room, board, and other fees. If that family doesn’t have savings or available income to cover this amount, their only option is to take a loan to make up the difference.
So while the college stays true to its "no-loan" pledge for the aid portion, families are still left having to borrow in many cases—just not in the form of the loans colleges conveniently exclude from their aid packages.
A Disconnect Between Reality and Marketing
In this sense, the "no-loan" promise is more about clever marketing than making college genuinely affordable. It allows schools to attract a broader range of applicants by suggesting that they’re reducing the burden of debt. But for many families, the burden of paying for college remains the same.
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During his inaugural address, Father Dowd announced Pathways to Notre Dame—a historic expansion to the university's affordability and financial aid initiatives for undergraduate students: https://go.nd.edu/e047fc
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