Two recent proposals by President Barack Obama and Republicans in the United States House of Representatives to cut federal funding for university financial aid programs during fiscal year 2012 would significantly impact aid at the College, according to Director of Financial Aid Virginia Hazen. Hazen labeled the Republican proposal as "the worst scenario" for the College's undergraduate financial aid system, but said both proposals could strain College aid programs.
The plan presented by Republicans would reduce the amount of funding the College receives from the federal government by over $1.6 million, Hazen said. Obama's proposal would cost the College only $70,000, but would pose a greater financial burden to students and their families than the Republican plan, according to Hazen.
"[Both proposals] will put a lot more pressure on the [College's] overall budget since we will have to find money somewhere else," Hazen said. "In the past, the College has always made up these differences I don't know if they can do the same if these cuts go through."
Due to the February 2010 budget cuts, the College reverted to its financial aid policy in place prior to 2008, which required students with family incomes above $75,000 to take out loans ranging from $2,500 to $5,500 per year, The Dartmouth previously reported. The policy began with members of the Class of 2015 and did not affect the no-loan financial aid packages of students already enrolled at the College.
In an attempt to reduce discretionary spending, Republicans proposed a spending bill on Feb. 11 to cut spending on several need-based financial aid grants, according to the National Association of Student Financial Aid Administrators website. Proposed cuts include a reduction in the maximum amount awarded to recipients of Pell Grants, which go to low-income students who might otherwise be unable to afford the costs of higher education.
The proposal would also eliminate the Federal Supplemental Educational Opportunity Grant, which offers money to students who demonstrate exceptional need, and the Leveraging Educational Assistance Partnership, which provides funds for grants and work-study programs for financially eligible students, according to the NASFAA website.
The Republicans' proposal to cut the maximum Pell Grant by 15 percent from $5,550 to $4,705 would affect 602 grant recipients at the College, Hazen said. If the Pell Grant amount is reduced, Darmtouth will lose $500,000, according to Hazen.
The elimination of the SEOG program would cost the College over $1.1 million while the removal of LEAP would cost $60,000, according to Hazen.
In response to the Republican bill, Obama proposed a plan on Feb. 14 that conserves the original maximum Pell Grant award and the SEOG program, which Obama said is "critical to creating future generations that are well-educated and globally-competitive" in a budget report by the Office of Management and Budget.
Obama's proposal "won't be as harmful to the College," but could prove detrimental to students who require need-based financial aid, Hazen said.
The program would raise the interest in the Perkins Loans program from 5 percent to 6.8 percent, cut the Robert Byrd Honors Scholarship Program and eliminate government interest loan subsidies for graduate students, according to The Chronicle of Higher Education. Obama's plan would also eliminate LEAP and year-round Pell Grants, which allow students enrolled in accelerated summer programs at universities to receive funding, The Chronicle reported.
The only direct cost to the College under Obama's proposal would be the elimination of the year-long Pell grant program, Hazen said. The College would lose $70,000 in aid since those funds almost exclusively affects students enrolled during sophomore summer, she said.
If Obama's plan is signed into law, the College will seek to decrease the money coming "directly out of students' pockets" by adding additional work-study and loan programs, Hazen said.
Obama's proposal to eliminate the subsidy on graduate student loan interests would also raise the loans for Dartmouth graduate students, according to Tuck School of Business Director of Financial Aid Diane Bonin.
The average loan repayment for Tuck students would increase by approximately $2,300, Bonin said.
Loans for medical students would increase by approximately $6,500 under Obama's proposal, according to Dartmouth Medical School Director of Financial Aid Gordon Koff.
"The proposed cuts will really hurt these students," Koff said. "The amount of student loan repayment will dramatically change as medical students graduate and go into residency."
Bonin said Obama's commitment to the Pell Grant program is "admirable," but that it still presents an enormous cost to graduate students and "increases the demand for [the College's] institutional subsidized loans."
Koff said that if Obama's budget proposal passes, he will initiate more loan counseling at DMS to educate students about the changes.
Hazen said students should combat the cuts to federal funding presented in both proposals by writing to their Congressional representatives.
"It's better coming from the students than a school itself," she said.
Staff writer Angie Yang contributed to the reporting of this article.
