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The Dartmouth
May 21, 2024 | Latest Issue
The Dartmouth

Financial aid tries to compete

Dean of Admissions and Financial Aid Karl Furstenberg said the College's newly announced financial aid packages are meant to increase diversity and improve Dartmouth's standing relative to other Ivy League schools.

College President James Wright announced the changes at a faculty meeting Oct. 20.

Dartmouth followed Princeton, Yale, Stanford and Harvard universities as the fifth school since the spring to change its financial aid packages.

Furstenberg said the changes were partly a response to those made by the other universities, and Dartmouth and Princeton's new packages are very similar.

"The various changes we've made -- I think they'll be more attractive than [Harvard, Yale and Stanford's], particularly because it's a more comprehensive program," he said.

Furstenberg said about a decade has passed since the College made basic adjustments, and students' borrowing needs have increased. The changes will decrease the burden on students who receive financial aid, he said.

The changes

One "huge piece" of the new packages will make graduated loan reductions for students from families with incomes below $60,000 -- 54 percent of financial aid recipients -- starting with the Class of 2003, Furstenberg said. The loans will be replaced by scholarships totaling $1.98 million -- money that students will not be forced to repay to the College.

"It deals with the whole issue of student debt, and how it limits flexibility to make career choices," Furstenberg said. The graduated loan reductions:

-- Loans to students from families with incomes less than $30,000 will be reduced by $3,525, making them zero in the students' first year at the College.

-- Students with family incomes between $30,000 and $45,000 will have loans reduced by $2,400, receiving loans of $1,125 in their first year.

-- A loan reduction of $1,000 will be made for students with family incomes between $45,000 and $60,000. The students will receive $2,525 in loans in their first year.

-- Loans to all of those students will increase by $500 every year, which is consistent with past policy.

Other changes:

-- Scholarships from sources such as corporations and secondary schools are currently used to reduce students' financial aid packages. Starting next year, students will be able to keep 100 percent of outside scholarships.

Furstenberg said this change to the College's policy regarding outside scholarships will be implemented next year for all classes, impacting 37 percent of financial aid recipients.

But outside scholarships will not be returned retroactively, so members in the Class of 2000 will receive 100 percent of outside scholarships for their senior year, but not for any other year at the College.

-- Another aspect of the new packages will "take a little bit of pressure off for the summer" for students on financial aid, Furstenberg said. Usually, students must increase their summer earnings by $100 each year. Under the new packages, no increases will be expected in the summers of 1999 and 2000.

-- Furstenberg said the College will continue to consider family assets such as home equities and pensions on a case-by-case basis. However, he said, the assessments have been adjusted to more realistically reflect families' financial means.

-- The College will also increase international financial aid by six percent and allow families to receive all of the $1,500 Hope Scholarship tax credit.

Attracting applicants

Furstenberg said the changes will improve aid for both low- and middle-income families and should increase diversity at the College by encouraging more students who need aid to apply.

"This plan is constructed in a way that recognizes that some groups tend to have greater representation at the lower-income levels," he said.

"We think about this as a long-run thing that will really help in developing the [applicant] pool."

Furstenberg said the changes were also a "competitive consideration" that resulted from changes initiated by Princeton in the spring and followed by Yale, Stanford and Harvard.

Don Betterton, Princeton's director of financial aid, said the university changed its packages in the spring to "relieve the financial pressure we felt on the part of students and parents" in paying their tuition.

He said he was not surprised other schools followed Princeton's lead. "As a matter of fact, one of the goals was to provide leadership among the Ivies and similar colleges," Betterton said.

Harvard, Yale and Stanford did not make as many changes as Princeton and Dartmouth did, Furstenberg said.

Instead of reducing student loans on a graduated scale, Harvard reduced loans or work-study requirements by a flat rate of $2,000 for all students on financial aid. Students can choose between loans and work-study for the reductions.

"We felt that everybody who was receiving financial aid had been determined to need it, and so we just decided to treat everybody equally across the board," said David Illingworth, Harvard's associate director of financial aid.

He added Harvard's changes are a bit simpler than Dartmouth's, and do not single out certain groups of students.

Harvard has also decided to allow students to keep 100 percent of outside scholarships.

Furstenberg said both Yale and Stanford have eliminated family assets as part of the consideration for financial aid packages and have not made adjustments to student loans.

Financial aid officers at Yale and Stanford could not be reached for comment.

The future

Michael Bartini, director of financial aid at Brown University, said the university is considering making changes.

"I think it's fair to say that Brown has been interested in changes to financial aid policy made by other institutions," he said. "We have had discussions on campus and will continue to have discussions ... to determine our directions. But at this time, it's still too early to determine what we will do, if we will do anything."

Brown is the only Ivy League school that does not have a need-blind admissions policy.

Furstenberg said it is "very tricky" to figure out exactly how the new policies will change admissions competition among the schools, because potential students often use other packages offered to them to bargain with financial aid offices.

For example, he said Harvard matches other schools' offers to students on a case-by-case basis.

Furstenberg said the recent $54-million "Will to Excel" capital campaign and an increase in the College's endowment have provided the College with the resources to make the changes. He said he doubts many other schools will have the financial means to adjust policies.

"It's a game that not many institutions can play, because it's very expensive," he said.