>> Because they still want people that can afford to pay $50k/year to pay it.
That's not quite what I was getting at. My question is: Why are they making alumni find the $120M in grants, when they could just forgive the loan directly?
There's nothing that says a lender has to collect on its debt. It can choose to forgive the debt.
So it's possible for Brown to charge $50K/year generally, collect it from the rich kids, and then forgive the debt incurred by the poor kids.
But that's not what they're doing. They're keeping the money, and asking alumni and other charitable institutions to pay them.
The loans don't actually come from the school- they are often government-sponsored, though those typically cap out at $12k a year or something. The rest you have to get through private loans, and the school has no way to forgive them- unless they want to write a check to my loan provider.
That's not quite what I was getting at. My question is: Why are they making alumni find the $120M in grants, when they could just forgive the loan directly?
There's nothing that says a lender has to collect on its debt. It can choose to forgive the debt.
So it's possible for Brown to charge $50K/year generally, collect it from the rich kids, and then forgive the debt incurred by the poor kids.
But that's not what they're doing. They're keeping the money, and asking alumni and other charitable institutions to pay them.