Student loans eliminated for students from families earning $125,000 or less

The expanded aid will begin with the Class of 2026.

by Pierce Wilson | 6/1/21 2:00am

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by Maddie Doerr / The Dartmouth

On May 12, Dartmouth announced that beginning with members of the Class of 2026, students from families with an annual household income of $125,000 or less will qualify for full-tuition scholarships without loans. The threshold marks a $25,000 increase from the previous $100,000 threshold, according to Presidential Commission on Financial Aid co-chair Julie McKenna. 

According to the College’s press release, the expanded eligibility for free tuition comes as part of the $3 billion Call to Lead campaign. Julie McKenna said the increase to a $125,000 no-loan threshold is part of the College’s “natural progression.”

“In 2005, the threshold was $45,000, and then from 2012 to current, it was $100,000,” Julie Mckenna said. “Our next step is to try to increase it to $150,000.” 

According to vice provost for enrollment and dean of admissions and financial aid Lee Coffin, this new policy means that eligible students will no longer have student loans included in their financial aid package from Dartmouth. All of their demonstrated need will be met through scholarships, grants and work-study, he said.

“We will not be packaging any of these families with loans,” Coffin said. “However, a family on their own could still take out a loan, and that would be an independent proceeding. The College is saying that, ‘We’re not meeting your need with a federal loan anymore.’” 

Financial aid director Dino Koff said “many schools” do not include student loans in their financial aid packages, and that Dartmouth is working towards doing the same for students at all income levels — beginning with working towards increasing the threshold to $150,000. Currently, Dartmouth and Cornell University are the only schools in the Ivy League which award student loans to undergraduates, he said. 

Koff added that, even with the implementation of this policy, students and families may still ask for loans to help with family and student contributions.

“Students can come and ask for a student loan, whether it's to help cover the family contribution, or if a student might not want to work in a term,” Koff said.

Koff added that “many ‘no-loans’ schools still have high student loan debt” because students and families take out additional loans.

Coffin said that the loans that Dartmouth packages — usually totaling about $25,000 over four years for students who receive loans through their financial aid package — are “on the low side” of what colleges in the U.S typically award to families. However, he added that students can end up with more debt when families decide to borrow beyond what is awarded to them to cover other costs. Koff explained that, in these situations, families will usually turn to private loans and federal parent PLUS loans. 

Koff said that the College still has a goal of “no loans for everybody,” and increasing the no-loan threshold to $125,000 is the next step in reaching that goal.

Ami Nwaoha ’23 said that he had federal loans included in his financial aid package, although his family’s income exceeds the $125,000 threshold eligibility requirements for the Class of 2026.

“It's just annoying to have to [take out loans] for Dartmouth,” he said. “If it was at a different school, I could understand the need to do it, but with the size of the endowment, it’s just frustrating.”

Nwaoha added that he believes eliminating loans for all students is an important aspect of bringing more students to Dartmouth, as well as decreasing financial stress that students experience while studying at Dartmouth.

A member of the Class of 2023, who requested anonymity as a condition for disclosing what he considers sensitive financial information, said that his financial aid package included the maximum amount of federal unsubsidized loans. Although his family could afford to cover the remainder of tuition, they decided to take out more loans to help pay for the family contribution outlined in his financial aid package. 

He said that while his student loans are not a major source of stress for him, they will limit the post-graduation opportunities he could feasibly pursue. 

“My monthly payments coming out should only be $200 to $400 a month — that's fairly manageable,” he said. “But it is always in the back of my mind. I don't really feel like I can leave college and be like, ‘Oh, I'll take a year to do a cool thing.’ I feel like I need to go out and start making an income so I can pay off my loans.”

The Presidential Commission on Financial Aid led the expansion of eligibility requirements, according to the other co-chair David McKenna. He said that the commission was formed last March and seeks to improve financial access to the Dartmouth experience.  

“Financial aid actually is the key to bringing super talented kids to Dartmouth, because if you have really good financial aid, you can get these awesome kids who can't afford it,” David McKenna said. 

David McKenna said financial aid is the “key to community,” as financial aid ensures students can be on more equal economic footing as a community. He added that financial aid is also the “key to leadership” as “a lot of the best leadership jobs are the least lucrative jobs.” 

“If you're really thinking about going and changing the world, it’s often not on Wall Street — it’s often somewhere on Main Street where you've got a lower salary,” he said. “If you are burdened by a lot of loans, then you might make a different decision about what you want to do.”

Coffin said this announcement was important to signal to the community that the College is aware of how the pandemic may have impacted families financially.

“A lot of families have seen their income or their assets really affected by the economic conditions,”Coffin said. “[The announcement] was a way of the College saying, ‘We remain committed to socioeconomic access to families who feel that the cost of a Dartmouth education is out of their reach.’” 

According to Julie McKenna, the commission has four additional objectives: to transition back to need-blind admissions for international undergraduates — the admissions office used to be need-blind for international students from the Class of 2012 through the Class of 2019, but became “need-aware” in 2015 starting with the Class of 2020 — provide scholarships for graduate students, fund off-campus programs for undergraduate students and support high-need undergraduates. 

Koff elaborated on the goal of supporting off-campus programs, explaining that for study abroads that are more expensive than regular Dartmouth tuition, financial aid currently only covers 50% of excess costs. Ideally, he said, the costs of studying abroad or in Hanover would be the same for students who receive financial aid. 

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