- Dartmouth announced it's removing federal student loans from its financial aid packages.
- Instead, it will expand grant and scholarship options that do not need to be paid back.
- It joined a growing number of schools that have removed loans to decrease debt burdens post-grad.
Dartmouth College just joined the growing number of schools in the US working to remove the student debt burden that accompanies a higher education.
On Monday, Dartmouth — a private New Hampshire college with about 4,100 undergraduate students — announced it would be eliminating federal and institutional student loans from its financial aid packages, replacing them with scholarship grants, according to a Dartmouth article. The shift was made possible by more than $80 million in gifts to the school's endowment from 65 families, and it will go into effect on June 23, when the 2022 summer term begins.
"Thanks to this extraordinary investment by our community, students can prepare for lives of impact with fewer constraints," Dartmouth President Philip Hanlon said in a statement. "Eliminating loans from financial aid packages will allow Dartmouth undergraduates to seek their purpose and passion in the broadest possible range of career possibilities."
Prior to this announcement, Dartmouth offered students from families with incomes under $125,000 need-based financial aid without requiring federal student loans. Now the benefit is available for all students, which the school estimates will decrease debt burdens for "hundreds of middle-income Dartmouth students" by an average of $22,000 over four years — and $5,500 in borrowing for each student that would have had to take out loans per year.
"Dartmouth already offers generous assistance to students from low-income backgrounds, and this move to a universal no-loan policy will help middle-income families who often have to stretch their budgets to meet the cost of higher education," Director of Financial Aid Dino Koff said in a statement.
Insider previously reported on the schools in the US that are working to ease the student debt burden that currently falls on over 40 million Americans. Princeton became the first university in the US to replace loans with grants that do not need to be repaid in 2001, with schools like Amherst, Harvard, and Yale launching similar initiatives in the following years. And private, smaller schools like Colgate University in New York and Smith College in Massachusetts adopted the same policy last year.
This also comes as President Joe Biden is working on ways to reduce the student debt burden himself with an executive order. Recent reports have suggested he is considering $10,000 in relief for borrowers making under $150,000 a year, and while the White House has not publicly confirmed any plans, Biden told reporters over the weekend a decision on relief is near, and a further extension of the over two-year pause on loan payments is "on the table."