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The Dartmouth
July 26, 2025 | Latest Issue
The Dartmouth

Penn's financial aid boost mirrors College policy

The University of Pennsylvania's new financial aid policies and a recent report about student debt in New Hampshire has raised questions about the best financial aid calculation strategies for colleges to use.

On March 23, Penn President Amy Gutmann unveiled plans to pay tuition as well as room and board for students whose families earn less than $50,000 per year. The change, which will affect between 300 and 400 students, is an effort to diversify the student population.

Penn will eliminate loan requirements and instead provide grants for students whose families fall in this income bracket. This move is part of a larger trend reflecting the Century Foundation's 2003 survey findings that only 3 percent of students at the most selective schools come from the poorest socio-economic quarter of families.

Dartmouth's current financial aid policy stipulates that, starting with the Class of 2009, students with family incomes less than $30,000, barring the existence of substantial assets, will receive grants covering all of their Dartmouth education. Starting with the Class of 2005, students whose families earn less than $45,000 also benefited. These students receive full grants their first year, with small loans to cover remaining costs in their three years left at the College, said Director of Financial Aid Virginia Hazen.

She went on the warn against the dangers of oversimplifying the financial aid equation.

"To simply say that there will be no contribution if the income is below a certain figure departs from need-based aid in some instances," Hazen said. She cited a hypothetical example of a student with a family income of $30,000, but $2 million in assets.

"If you based the determination strictly on income as some institutions are proposing, the student [with $2 million in assets] would get significant aid," Hazen said.

Penn, like Dartmouth, says that it examines each student's financial aid situation beyond family earnings.

In contrast to the perceived relative simplicity of Penn's new policy, Hazen suggested a variety of alternatives to diversify the population.

"Rather than departing from need-based aid, [schools] could either lower the amount they are expecting students to borrow or do outreach to schools to ensure that the needy students receive the education and guidance they need to qualify for college," Hazen said.

All of this discussion surrounding the most effective financial aid strategies is especially timely for the College, considering the results of a report by the New Hampshire Public Interest Research Group released April 5.

According to the survey, 54 percent of public college and 67 percent of private college graduates would have unmanageable debt as starting teachers in New Hampshire. Furthermore, 37 percent of public and 55 percent of private college graduates would have unmanageable debt as social workers across the nation.

In a move that will likely exacerbate the problem, Congress passed a law in February cutting $12 billion from student loan programs -- the largest cut to student aid programs in history.