Dartmouth cuts no-loan financial aid for families with income above $75,000

Only two years after following in Princeton’s footsteps by instituting a no-loan financial-aid policy, Dartmouth announced last week that it will be reinstituting loans in the financial-aid packages of families with incomes higher than $75,000, starting with the Class of 2015.

Dartmouth’s financial-aid change comes as part of a package of cuts designed to close the Hanover, N.H., school’s $100 million annual budget deficit. The structural budget deficit emerged after a 23 percent endowment loss during fiscal year 2009.

Students with family incomes greater than $75,000 will be expected to take out loans of between $2,500 and $5,500 a year, according to a press release.

Dartmouth’s dean of admissions and financial aid, Maria Laskaris, told Inside Higher Ed that, if the financial demographics of students holds constant until the change is implemented, roughly 28 percent of Darmouth’s student body would fall into the category of those who would still receive financial aid but would be expected to take out loans, while 22 percent of its student body would receive financial aid without having to take out loans.

As a result of the loans, affected students will graduate with a debt of between $10,000 and $22,000, Dartmouth President Jim Yong Kim said during a press conference announcing the school’s budget-cut plans, according to The Dartmouth.

“Just as a point of information, $22,000 is about half of what I graduated with,” he added.

To ensure that current students will not be forced to leave Dartmouth, a 10 percent increase to the financial-aid budget will be made in the coming year, Kim said.

In addition to the $5 million Dartmouth expects to save annually by reinstituting loans, Dartmouth’s Board of Trustees approved plans to cut administrative costs by $25 million, benefits and compensation by $13 million, and professional-school budgets by $14 million annually.

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As part of the cuts, Dartmouth has laid off 38 non-teaching staff members and expects a comparable number of layoffs in April, according to the press release.

Dartmouth also announced its smallest percentage increase in fees for tuition, room and board since 2005 — an increase of 4.6 percent, to $52,275 per year.

The announcement comes a week after Williams College announced its own move away from a no-loan policy, though it too will continue to offer no-loan packages to its students with the lowest family incomes.