The Class of 2005 will be the first beneficiary of a new $1.6 million financial aid package that plans to reduce loan and work expectations, particularly for students that come from lower income families.
While financial aid students currently at Dartmouth won't see any changes to their loans, they will receive modest cutbacks in their work earnings requirements beginning next fall.
The move comes during a year in which Dartmouth's endowment jumped a record 46 percent and other Ivy League schools introduced sweeping overhauls to their financial aid programs.
Under the new package, students beginning in the Class of 2005 will have their loans reduced between $1,225 and $1,500 annually. This means that students from families with annual incomes less than $45,000 will have no loans in the first year of enrollment.
All students on financial aid will have their summer work requirement reduced. The burden for current students will be diminished by $200, while incoming freshmen will see a $250 reduction for the summer plus a $275 decrease in work earnings for the academic year.
"What we're trying to do is make an adjustment that looks at what's sound for students to be able to borrow," Dean of Admissions and Financial Aid Karl Furstenberg said. "It should convey to current students and prospective students that Dartmouth cares."
When asked why the more ambitious components of the new package won't affect current students, Furstenberg said that including them in the plan would be too expensive for the College.
Dartmouth's new package expands on the major $2.6 million increase in financial aid made in 1998, a year in which a wave of other highly selective schools similarly revamped their financial assistance programs.
Dartmouth's new plan is significantly less comprehensive than the other financial aid changes made this year in the Ivy League. Soon after Princeton University introduced a major overhaul that eliminates all student loans and replaces them with scholarships, Harvard University announced that it would reduce student loans by $2,000 a student.
Furstenberg said that following Princeton's lead of eliminating all loans was never considered. "It's not economically possible," he explained. "What Princeton has done -- they're in a different category than everyone else. And Harvard has made some large adjustments. But other than those two schools, Dartmouth is just as generous as anyone else."
Under the new plan, the average student scholarship is $17,600. That number will be about $20,000 at Harvard next year, an amount similar to what the average Princeton financial aid student currently receives.
At Brown University, the least endowed member of the Ivy League and also the only one to consider an applicant's finances in the admissions process, the average financial aid student receives $19, 280. (Brown plans to institute a need-blind policy beginning next year.) All four institutions charge roughly the same amount of tuition.
When Princeton announced that it would eliminate loans, the University said it was reversing the nationwide trend toward greater student debt at graduation. Many hoped that Princeton would frighten other schools into following suit, but that prospect seemed to vanish when Harvard, the institution with the largest endowment in higher education, decided to maintain its loan policy.
"Harvard has really felt for some time that it's important for there to be some contribution from the students or their family in this education. Reducing the self-help seemed the right way to go in reducing the burden," said Harvard Director of Communications for the Faculty of Arts and Sciences Sally Baker.
But the administration at Princeton -- which enjoys the greatest per capita endowment -- has said loans hurt, instead of help, students in their education. "Princeton is trying to make sure that those who want to come here and are accepted are able to attend," said spokesperson Marilyn Marks.
Furstenberg said consideration of other schools' financial aid packages played only a partial role in influencing Dartmouth's new policy. "The other thing we have to balance when we make these changes is what's fair to students, what other schools do, what we can afford," he said. "It's nice that we have the endowment to do it."
