If you’ve got a superstar academic kid, you may have considered the Ivy League but didn’t apply because of the high cost and worries over having to borrow a mountain of money to attend. In fact, graduates from Ivy League schools often come out of school owing far less than their counterparts at “bargain” state schools. Princeton, in particular, is a thrifty place to go to school if you can get accepted.
Most of their students graduate owing less then $6,000 in student loans. You may assume the low debt number is because only rich kids go to Ivy League schools, but that’s not it. In fact, Ivy League schools can afford to be more generous with their scholarship students than state schools. It’s more competitive to get admitted to these schools, but once in, you’re competing in a smaller pool for more funds. It’s a great gig if you can get it.
Princeton stands out even among its Ivy League brethren because they don’t include loans as part of the financial aid awards. What this means is that typically when you get your financial aid package, student loans are part and parcel of the deal. If you choose not to take them, that means you’ll have to pay more out of pocket. In 2001, Princeton made a no-loan policy and replaced them in financial aid awards with grants that do not have to be repaid.
For the self-help portion – i.e. the amount the student is required to pay to attend if they can’t pay out of pocket – a campus job of just nine hours a week will cover that burden. Another generous difference is that with other colleges, if you earn outside scholarships, the school applies these to the financial aid (i.e. grants or internal scholarships) so it doesn’t decrease your out of pocket costs. Princeton, by comparison, applies outside scholarships to the amount the student and family would contribute.
Also, when calculating the amount a family must contribute, they don’t include the family home in the asset calculation and for families that don’t own a home, they make a special allowance that benefits the family even further. Students are asked to contribute just 5% of any savings they have, which is one-fourth to one-fifth of what is asked by other schools. And over the summer, students are asked to save up and contribute $1,530, but this can be disregarded for students that work at unpaid internships or do volunteer work.
Finally, for those that do need to borrow to attend Princeton, the college offers loans to parents that are far more advantageous than even federal student loans. Currently, federal Direct PLUS loans to parents are at a rate of 6.41%. You can see on the chart above that, by comparison, Princeton’s parent loan interest rates are drastically lower. Variable rates are currently at 1.2% and 1.3%, and fixed rates are a low 4.3%. This is a comparative bargain and loans come with a 14 year repayment term.
If you’re considering an Ivy League school, it’s worthwhile to apply to Princeton if you think you can get in. You can get a world class education at a bargain basement price. What’s not to love about that? No matter where you borrow from – your university, the federal government or private lenders – sign up for Tuition.io’s free student loan tool to track and optimize your debt. Be sure to read our blog daily for news and tips on all things student loans and check out our Student Loan Help Center to gain an understanding of student loan terminology and your repayment options.