Dartmouth College nixes student loans

Dartmouth College in Hanover, New Hampshire is eliminating student loans. Photo by Jennifer Hauck/Valley News

Editor’s note: This article by John Lippman was first published in the Valley News on June 21.

Attention college students: you will no longer have to go into debt to attend Dartmouth College.

Thanks to its well-heeled alumni, Dartmouth has raised enough money in its fundraising campaign to eliminate one of the most cumbersome components of the financial aid package for undergraduates: student loans.

Dartmouth had already eliminated student loans for families earning less than $125,000. Effective with the summer term that begins Thursday, the college will expand the program to include students from families with household incomes above $125,000. Students won’t need to take out government or institutional loans to help cover the cost of their education.

The move extends the reach of Dartmouth financial aid to a broader band of the middle class and even so-called “upper middle class” families who don’t qualify for the types of financial aid for which lower-income students are eligible but aren’t wealthy enough to afford to pay the full $83,802 tuition, room and board to attend Dartmouth.

In reality, most students pay below the sticker price through a combination of family support, scholarships and loans that varies according to a tiered system geared to family income level.

For example, families with a combined income below $65,000 are not expected to pay anything toward their daughter’s or son’s educational expense at Dartmouth, and tuition — at nearly $61,000 the largest component of overall cost — is waived for needs-based students whose family income is below $125,000.

Dartmouth said it will cover the difference created by eliminating student loans by increasing the “scholarship” component of the financial aid package. The college estimates the expanded loan policy will affect about 450 students, or about 39% of the incoming 1,150 students for the 2022-23 academic year.

“Higher education middle income is much different than the higher middle income the government talks about,” Dino Koff, director of financial aid at Dartmouth, said in an interview on Monday. “We have so many (financial aid) programs for under $50,000, under $75,000, under $125,000.”

But even families in income brackets between $125,000 and $250,000 can face a “large bill,” Koff said. The strain is exacerbated if the family is paying for college educations of multiple children.

(Koff said that in a typical given year, nearly half of Dartmouth students come from families who fund the full cost of their education without aid).

Without the obligation to repay student loans, Dartmouth graduates will have more career choices and fewer worries when they leave, Koff noted.

“We would like our students to go into any field they would like to,” he said.

Despite Dartmouth being among the most expensive colleges in the country, students who take out loans to attend Dartmouth nonetheless graduate with a relatively moderate debt burden in comparison to students attending colleges that do not have the endowments to fund financial aid programs.

The average loan for Dartmouth students is $5,500 per year, or $22,000 for four years, according to Dartmouth, whereas the national average has hovered around $30,000, according to the annual survey published by U.S. News.

Koff said that students still could apply for a loan for certain expenses, such as to purchase a new laptop, but they no longer will be included as part of the student’s financial aid package.

And students still could request a loan to help pay for the “parent contribution” component of their Dartmouth bill, lowering what the family would be asked to pay out of pocket, Koff explained.

“For the middle income family, $22,000 will make a huge difference,” Koff said.

To a great extent, the ability of Dartmouth to enable its students to graduate debt-free — the college estimates it is one of only six in the country to do so after Harvard, Yale, Princeton, Amherst and MIT — is a testament to the college’s network of financially successful alumni.

About $120 million in “scholarship gifts and pledges” have been made to the college’s endowment since Sept. 1, Dartmouth said, fueled largely by alumni giving in the Call to Lead fundraising campaign that was launched in 2018 and to date has raised $3.3 billion.

Dartmouth said that more than 65 families contributed more than $80 million to eliminate loan requirements for undergraduates.

In particular, Dartmouth credited alumna Dr. Anne Kubik, a Boston OBGYN and member of the Presidential Commission on Financial Aid with adding $10 million of her own money “to an earlier commitment” in addition to $25 million from an anonymous donor for establishing what the college termed one of its “largest scholarship endowments.”

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