Novicoff: Dartmouth didn’t even get rid of half of student loans for undergraduates
While Dartmouth gets glowing coverage on “eliminating student loans for undergraduates,” prospective students will graduate with just 27% less debt than the class of 2021.
Dartmouth undergraduates will never have student loans again – or at least that’s what you’d think reading last month’s headlines.
Associated press: “Dartmouth to eliminate loans for undergraduates.”
Bloomberg: “Dartmouth is getting rid of student loans for undergraduates.”
BNC News: “Dartmouth College is eliminating student loans and replacing them with scholarships.”
ABC News: “Dartmouth to eliminate loans for undergraduates.”
CNN: “Dartmouth College is eliminating undergraduate student loans and replacing them with scholarships.”
New York Post: “Dartmouth to eliminate loans for undergraduates.”
The Dartmouth used the same language: “Dartmouth to eliminate loans for undergraduates.”
The problem with these titles is that they are extremely misleading, if not incorrect. Some Dartmouth students will still have loans this year. Some Dartmouth students will have loans next year. The class of 2026 will have student loans. According to the announced policy, each class that will graduate from the College will always have hundreds of graduating students with student loans.
According Dartmouth’s latest numbers, 34% of the class of 2021 took out student loans, with an average loan amount of $23,217. This brings the total debt of the class of 1,144 students to $9,030,484 from the 384 students who took out loans.
According to the College happy announcement of its new policy, “approximately 450 Dartmouth undergraduates have financial aid offers for the upcoming 2022-2023 academic year that include loans. Replacing federal and institutional loans with larger scholarships will eliminate up to $5,500 loan required for each student per year.
Mathematically, 450 undergraduates who need to take out loans equates to about 113 students per class. “Up to $5,500” per student per year is up to $22,000 for each of these students upon graduation. A total of 113 students with up to $22,000 less debt, a total debt reduction of $2,475,000 for each promotion.
To put it all in with the Class of 2021’s $9 million in student debt, this policy change at Dartmouth, hailed as “eliminating[ing] loans for undergraduates” actually eliminated only about a quarter – 27.4% to be exact – of student loans for undergraduates. So while Dartmouth enjoys rave coverage in newspapers across the country, 72.6% of the debt it imposes on its students remains.
Dartmouth has not eliminated student debt for undergraduates. What Dartmouth actually did was announce that students would no longer get loans in their financial aid programsand these would be replaced by scholarships.
But most student loans in Dartmouth are not taken out because the student is prompted by their financial aid. Most student loans are taken out because they can’t afford the amount of money Dartmouth charges them. This is an essential distinction.
Starting this fall, it will cost $83,802 attend only one year at Dartmouth College — about 124% of median income in America. If a student qualifies for $50,000 in financial aid, that student and their family would have to pay the remaining $33,802. If they cannot because, for example, nobody’s mortgage changes when their kids go to college, they will take out loans. This is how students end up with the vast majority of their student loans, not through “compulsory borrowing”.
Since the College is need-blind, economically speaking, the Class of 2026 should be similar to the Class of 2021, except there are no loans on their financial aid scholarships. Therefore, the Class of 2026 will graduate with 27.4% less debt than the Class of 2021: approximately $6,555,484 for the Class of 2026 versus $9,030,484 for the Class of 2021. endowment growth trend, they will probably graduate with millions. dollars in debt from a school with an endowment over $10 billion. If that sounds ridiculous to you, that’s because it is. The problem of student debt is easy to solve and even easier to pay. The problem is that the administration of Dartmouth has no interest in solving it.
First, Dartmouth needs to stop obsessing over its perception of “demonstrated need,” which is clearly not accurate if hundreds of students are demonstrating more need by taking out loans.. There is no reason to take out loans that are anything other than a “need”. No one takes out a loan for fun.
The College should institute a policy where a family who cannot pay the difference between $83,802 and their financial aid can appeal for more help. These calls should be encouraged. Then after getting those calls, Dartmouth should just give those families more help..
The cynics and skeptics among you might wonder: aren’t some parents just going to take advantage and pretend they can’t pay? I’m not so sure, but the College will know if they’ve been too generous in this regard if the total amount they pay out after appeals far exceeds $6,555,484, the amount of the promotion’s debt of 2021 minus the amount of “required borrowing” which is eliminated by the policy change. They will know if they have been too stingy if they give much less. Admissions is blind to need, so each class should have roughly the same additional need each year, which we know is about $6,555,484 after eliminating loans in college programs. financial aid.
Here are some ways to pay that $6,555,484:
- Increase the College’s annual budget by $1,126,000,000 budget by 0.58%.
- Reduce administration and development salaries and benefits by less than 10%. Those wages and benefits have already dropped 6.3% This yearand I didn’t notice the administration getting worse (that would be hard to notice!).
- Remove it from the $8.5 billion endowment, optimistically assuming Dartmouth could survive with a 0.07% lower endowment.
- Make a new fundraising campaign specifically for this. Dartmouth high above $276 million last year – only use 2.4% to keep Dartmouth students debt free. Several people have given more than $6 million individually Last year. Next year call one of them the Glorious Debt-Canceler or whatever and give him a big plaque in the class of 1953 Commons. Donors like that!
I don’t care which of these solutions Dartmouth chooses. Here’s the important part: No one should walk out of debt from a school with $8.5 billion lying around. Perhaps the new College President, Sian Leah Beilock, can accomplish this tiny, easy goal in her freshman year. If she can’t, then we should let some randomly chosen students lead the school to change – they would do a better job than the current administration.
Marc Novicoff is part of the class of 2022.
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