Student loans are one of the biggest stressors facing college graduates. In fact, the Federal Reserve of St. Louis says that nearly 44 million Americans owe $1.5 trillion in student loans. Many students don’t have another option to finance their education, but more and more universities are doing their part to help.
This month, Dartmouth College announced plans to eliminate loans from its student financial aid packages and increase the size of scholarship awards. Currently, half of all Dartmouth undergraduates receive some form of financial aid. The hope is that eliminating student loans will provide more opportunities for middle- and low-income families.
“Every deserving student will have the opportunity to enjoy—and excel in—the full Dartmouth experience. Our residential life will be more vibrant than ever, as we will attract an incredibly diverse mix of students from all socioeconomic, geographic, and cultural backgrounds,” said President Phil Hanlon in a statement.
Like other colleges, Dartmouth has students who struggle with debt. Currently, students whose families make $100,000 or less are already exempt from having to take out loans. Even so, some students still need extra assistance, and the university says that the average amount borrowed hovered around $23,400 for 2017 graduates.
Dartmouth is just the latest school to take this step. According to US News and World Report, there are currently 50 institutions that offer a no-loan policy to lower-income families. Overall, just 16 schools offer the no-loan option to every student, regardless of family income.
Many of the schools offering loan-free financial aid packages are Ivy league universities with tuition costing $45,000 or more per year. This includes Harvard University, Princeton and Yale. The 2018-2019 school year will be the first year that Brown University will remove loans from its financial aid packages.
One reason Ivy league schools are leading the charge is their access to endowments, or money that’s been donated and can be used for improvements to the institution. At the end of 2016, Harvard’s endowment stood at $36 billion, followed by Yale with $25 billion.
Dartmouth’s endowment is as robust, so it started a campaign entitled “The Call to Lead,” to fund their loan-free program. The hope is to raise $3 billion, $500 million of which will be used for financial aid. Of that, $80 million will be used in the initiative to eliminate loans from Dartmouth financial aid packages.
Since announcing the campaign on May 1, Dartmouth has raised $20 million.
“Dartmouth will implement these financial aid policy changes in the coming years as the endowed funding is secured through the campaign,” said a Dartmouth spokesperson.
Brittany is reporter at Yahoo Finance. Follow her on Twitter @bjonescooper.