Northwestern University is leading the way in helping its students avoid crippling college debt, a move that has already helped it recruit students from lower-income families and encouraged them to avoid borrowing too much.

Northwestern University’s “no-loan” policy means that colleges will strive to cover each family’s “demonstrated financial need,” which is based on information collected through the Free Application for Federal Student Aid (FAFSA). The “no-loan” institutions remove student loans from their financial aid packages and only feature grants, scholarships, work-study aid and other components.

By doing this, Northwestern is increasing its financial aid and offering university-funded scholarships. The funds for the additional financial assistance will come from gifts to the University, endowment earnings and other sources.

Northwestern has also increased aid for undocumented students who graduated from high schools in the United States. Through this, the university offers undocumented students a private alternative to federal or state loans and grants, for which they aren’t eligible.

Although universities with no-loan policies do not offer loans in their financial aid packages, they still allow students to borrow if they need it.

Studies show the approach is helping students avoid debt. About 70 percent of students in the U.S. take out loans to get a higher education. However, only 5-26 percent of students who attend no-loan colleges graduate with debt, and those students carry about half as much debt as the national average.

See a list of the 32 schools that have the no-loan policy here.

*The Federal Aid Deadline for the 2017 – 2018 academic year is June 30, 2018 – no matter what state you live in. Online applications must be submitted by midnight Central Time, June 30, 2018.