Just about every news story reporting on this country’s college debt climate uses the same word: crisis.
It’s an accurate descriptor — or so the numbers seems to indicate. Public college tuition costs have risen 250 percent over the last 30 years, while median family income grew only 16 percent during the same period. The average student is looking at $26,000 of debt when they graduate. Even President Obama labels the situation as a crisis, as the poorest students are saddled with more and more debt.
In an effort to combat the problem, the Department of Education created the College Scorecard, which provides students and families with a new kind of ranking by taking into account graduation rates, financial aid offerings, post-grad earnings — and most importantly — average debt. On it, these three liberal arts schools stand out as valuable options for low-income students, thanks to their high graduation rates, low student loan debt and the percentage of students eligible for federal Pell grants, which are available to those whose family incomes do not exceed $30,000 a year.
In stark contrast to many other universities, each of these colleges keep their students’ loan debt at least 50 percent lower than the national average. How do they remain academically solvent while not piling debt on their graduates?

Berea students hang out between classes. Courtesy of Berea College.

Berea College, Berea, Ky.

If you’ve never heard of Berea College in Kentucky, keep reading. It’s the only residential liberal arts school in America offering a completely free education to its nearly 1,600 students.
As President Lyle Roelofs explains, “nearly everything is different.”
Like other colleges with strong financial aid programs, Berea is selective, but it isn’t need-blind. It only accepts students whose family incomes fall beneath an income ceiling, providing a higher education opportunity — as Roelofs puts it — “to students wouldn’t get one otherwise.”
Berea is a very efficient educational experience, says Roelofs. Each student works part-time while on campus, holding jobs in numerous fields, from woodworking to hotel administration, to contribute to the $27,000 to $28,000 annual price of school. “We’re never interested in whether we can send some money to shareholders at the end of the year… We are much more like an entrepreneurial business with the idea that profits and successes get ploughed back into the enterprise,” he notes. To cover costs, 75 percent of tuition is handled by the endowment the college has accrued over its lengthy history. Only 15 percent comes from loan sources, primarily Pell grants (99 percent of students qualify) and similar state grants. A third of students don’t borrow anything at all, with the remainder receiving an average of about $6,700 in loans, almost 4 times less than the national average.
Perhaps more important is Berea’s graduation rate: 64 percent of its students receive a diploma. The average graduation rate for similar-income students nationwide is a dismal 9 percent. Roelofs attributes this jump to the focus that the school puts on each student and their families.
But can every college follow the Berea model? It would take something of a paradigm shift in approach, admits Roelofs. “Institutions are usually quite preoccupied with dealing with immediate challenges; they don’t consider radical changes,” he says. Still, other colleges could consider a more frugal approach. “If you don’t charge tuition, you can make much more sensible decisions on what the students actually need,” Roelofs notes. “People don’t look the gift horse in the mouth.”
“One of my favorite sayings is that just because an education is free doesn’t mean you can cut the corners. It still has to be first rate. Otherwise, our students would finish in four years and have nowhere to go.” Which would defeat the purpose of a place like Berea entirely.

The campus at WIlliams College. Courtesy of Williams College.

Williams College, Williamstown, Mass.

Williams College, located in western Massachusetts, is tiny and idyllic. It’s also the top-ranked national liberal arts college by U.S. News & Word Report, and it is one of the 50 most expensive colleges in the U.S., with an annual price tag of around $65,000. But it has a need-blind financial aid policy, making the average loan debt just over $13,000 (about half the national average), and many of the students who qualify for financial aid (more than 50 percent are eligible) are free of loans altogether.
How does Williams do it? By maintaining a strong endowment and an individualized approach to financial aid packages, says Paul Boyer, director of financial aid at Williams.
As one of the first schools in the country to make available a net price calculator for prospective students, Williams tries to evaluate each student, case by case, to ensure it’s offering the best plan. The school also makes a concerted effort to recruit students from diverse socioeconomic backgrounds, seeking out lower-income applicants. About 20 percent of current students receive Pell grants, double the amount at most other liberal arts colleges — and it’s increasing. “It’s been rising maybe 1 percent per year,” says Boyer. That may not sound like much, but it’s a far cry from most other schools (including Harvard, which hasn’t been able to crack a 10 percent ceiling).
Earning an average income of $58,000 a decade after graduation, students that receive financial aid, in general, have little trouble paying back their loans. The U.S. Department of Education even ranked Williams in its top 23 schools with low costs that lead to high incomes.

A spring day at Amherst College. Courtesy of Amherst College.

Amherst College, Amherst, Mass.

There must be something in the water in Massachusetts: Amherst, number two in U.S. News’s liberal arts ranking, also comes with a $65,000 yearly price tag. But just like Williams, its need-blind financial aid opportunities — which 58 percent of students qualify for — minimize its real cost. In fact, what students pay, on average, is actually half of the annual sticker price: $33,000.
Amherst is strictly anti-debt. “The most distinctive thing is our approach of not including loans, as we meet students’ full demonstrated need,” says Gail Holt, Amherst’s dean of financial aid. About 70 percent of students graduate with no debt whatsoever.
That’s an achievement that Amherst should be particularly proud of, considering that college costs and incomes aren’t rising at the same level in this country. As a result, more qualify for financial aid, and resources must be distributed among a wider number of students. At Amherst, Holt and her team try to serve a full spectrum of families and financial capabilities. “The hardest part is meeting the needs of such diverse populations.” With 24 percent of students eligible for Pell grants, it seems to be making headway.
Fortunately, for their students, these three schools earn As in crisis management. Will other universities be able to make the grade?