# Colleges are ditching student loans for grants

> Carleton College joins a growing movement to replace loans with free money, funded by major donations.
- Title: Colleges are ditching student loans for grants | Shortify
- Summary: Carleton College joins a growing movement to replace loans with free money, funded by major donations. More colleges are eliminating student loans from…
- Keywords: carleton college, student loans, financial aid, grants, scholarships, student debt, higher education, minnesota, middle-income students, loan elimination, business, technology
- Source: Business Insider — https://businessinsider.com/colleges-getting-rid-of-student-loan-debt-carleton-repayment-relief-2026-9
- Author: Ayelet Sheffey
- Published: 2026-09-16T15:26:52.768+00:00
- Read time: 1 min
- Topics: carleton college, student loans, financial aid, grants, scholarships, student debt, higher education, minnesota, middle-income students, loan elimination, business, technology
## Carleton eliminates student loans
Carleton College in Minnesota is removing student loans from financial aid packages and replacing them with grants and scholarships that don't require repayment.

> Eliminating loans from our financial aid packages will expand opportunities for students.
## Middle-income students benefit most
One-third of Carleton's incoming classes over the past decade came from middle-income households, the group most helped by eliminating loan requirements.
## Eighty million dollars funds the shift
Carleton is funding the change with eighty million dollars in donations and seeking an additional forty-eight million to keep the program running long-term.
## Other schools are following suit
Asbury Theological Seminary in Kentucky announced it would phase out federal student loans and shift toward scholarships. Princeton started this trend in two thousand one.
## Addressing a massive debt crisis
Over forty million Americans carry one point seven trillion dollars in student debt. Schools are trying to address this burden by reducing what students must borrow.
## Students still have other options
Students can still borrow loans outside their college's financial aid package and remain responsible for their expected family contribution based on income.
## Key takeaway

More colleges are eliminating student loans from financial aid packages, offering grants instead, though this approach requires significant fundraising to sustain.