A deciding factor in choosing the college that is right for you is the financial package each school presents to you. What school gave you the most financial aid? How much of it was scholarship? How much was student loans? If you chose to take a student loan, how much will you owe with interest? These are questions students hopefully will not have to ask in the near future. As schools like Dartmouth are removing student loans from their financial aid packages in the coming years, could this lead to a national change in financial aid?
Dartmouth’s call to lead
Dartmouth has planned to eliminate student loans from its financial aid packages in the coming future. In turn, the university plans to put more money in grants and scholarships to assist struggling students. This initiative is a part of Dartmouth’s recently announced $3 billion fundraising campaign entitled The Call to Lead. Out of the $3 billion raised, $500 million is planned to go to financial aid. Out of the $500 million, $80 million is focused on eliminating student loans. Dartmouth already has begun phasing out student loans by exempting families with incomes lower than $100,000 from taking them. Even with this exemption, many students at the university still take out loans. The Dartmouth class of 2017 who took out student loans are, on average, $23,400 in debt. Dartmouth’s goal is to increase the enrollment of middle-income students and give all students full access to the Dartmouth experience.
Is the end of student loans near?
Dartmouth is not the first university to announce the phase out of student loans. Ivy League schools including Harvard, Yale and, just recently, Brown have gotten rid of student loans from their financial aid packages. A reason these high-tuition schools are able to eliminate loans completely is because of their high amounts of endowments and donations. These schools can afford to invest more in the financial aid of their students. Schools outside of the Ivy League have been moving away from student loans, too. U.S. News and World Report states that more than 50 institutions have a no-loan policy for lower-income families with 16 of these institutions completely eliminating student loans. While there are hundreds of institutions that do have student loans in their financial aid packages, it is a promising sign that steps slowly are being taken to eliminate them.
Takeaway
Are student loans going away any time soon? Probably not, but more and more schools are moving in the right direction in phasing them out. It’s important for students deciding what schools to attend to seriously look at the finical aid packages given to them. Understand the difference between grants and loans. Understand how much interest will build up and how much you will have to pay once you graduate. If you don’t feel comfortable taking out a large student loan, looking at schools with no-loan policies is a great idea. Find an institution that not only academically works but financially works for you, too.
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