Today, the average cost of earning a bachelor’s degree at a four-year institution is more than $101,000, according to the Education Data Initiative—and student loan borrowers, on average, end up with $37,693 in debt. But Dartmouth College is working to combat rising debt for middle-income student loan borrowers.
While President Joe Biden campaigned on agreeing to cancel up to $10,000 in federal student loan debt per borrower, he has yet to follow through on wide-sweeping debt forgiveness. He has canceled roughly $20 billion in loans, but that only accounts for about 1% of all federal student loan debt. More than 45 million federal student loan borrowers owe a cumulative $1.7 trillion, according to the St. Louis Federal Reserve Bank.
At Dartmouth College, an Ivy League school in Hanover, N.H., some students won’t have to worry about taking out loans to go to school. Starting June 23, Dartmouth removed all federal and institutional loans from its undergraduate financial aid packages—instead replacing them with expanded scholarship grants, the school announced this week. The new policy is in effect for current and future Dartmouth students.
“Dartmouth has announced many new initiatives over the last year, but this one is exciting because it targets a population that is often overlooked,” Dino Koff, Dartmouth’s director of financial aid, tells Fortune. “Going no loan for all incomes allows students to have greater flexibility as they prepare to launch their careers.”
The cost of attendance at Dartmouth (including tuition, fees, housing, and food) for the 2022–23 academic year is more than $80,000, and currently, the average scholarship award for the class of 2025 is $62,900. One-year tuition alone at Dartmouth stands at $60,687, while the national average at a private college is $33,150.
How (and why) Dartmouth will eliminate loans
In 2020, Dartmouth set up a campaign goal to eliminate student loan requirements, and more than 65 families made gifts totaling $80 million.
This new policy will particularly benefit middle-income families, Dartmouth officials say. Previously, only families with an annual income of $125,000 or less were offered need-based aid without a required loan component.
Starting June 23, however, Dartmouth removed that income requirement, and families who earn more than $125,000 per year will qualify for the new policy. This will decrease debt burden by an average of $22,000 across four years, according to the school’s announcement. The school also offers more financial aid to families who earn less than $65,000 per year.
In 2020, Dartmouth president Philip J. Hanlon established the Presidential Commission on Financial Aid while hundreds of families at the school were facing financial hardship as a result of the pandemic. The commission was established in partnership with the office of financial aid at Dartmouth to secure funding for students affected by the pandemic, educate the Dartmouth community about financial aid, and develop a long-term financial aid program.
“Thanks to this extraordinary investment by our community, students can prepare for lives of impact with fewer constraints,” Hanlon said in a statement announcing the new policy. “Eliminating loans from financial aid packages will allow Dartmouth undergraduates to seek their purpose and passion in the broadest possible range of career possibilities.”
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