STUDENT LOANS
An Integral Part of the Financial Aid Program
IN the 1956 Alumni Fund Report, presented in this issue, no particular prominence is given to the fact that $25,000 of the campaign's net income was allocated to the establishment of an Alumni Fund Loan Fund. But this turning of the Fund to support another side of the College's financial aid program, after endowing four Alumni Fund Scholarships and building up an Alumni Fund Scholarship Reserve of over $200,000, is deserving of more than passing notice, for it underscores a form of aid that is growing yearly in total amount and is increasingly important in Dartmouth's efforts to help needy students meet the costs of a college education.
The total of undergraduate loans this year will go beyond $100,000 for the first time. The budgeted figure of 5105,000 compares with actual loans of $92,000 last year, $80,000 two years ago, and $60,000 in 1953-54. To meet the need for more funds this year, the Alumni Fund is, in fact, providing more than the portion of its $25,000 that will be used with other reserves, for the Trustees have approved the transfer of an additional $18,000 from the Alumni Fund Scholarship Reserve to the loan program.
Student loans have been an integral part of Dartmouth's financial aid program for a great many years; in fact, Dartmouth historically has been a leader among colleges in this respect. This can be explained partly by limited scholarship resources in past years, but it is also true that in its financial aid philosophy Dartmouth has never felt it to be unwholesome for a needy student to "bet on himself" to the extent of assuming some part of his college expenses as a future obligation, so long as it is not a heavy burden.
Over the years, loans from the College have been available to some students for whom scholarships could not be provided. Men who start off without financial aid and subsequently need help are given the opportunity to apply for loans. In most cases they need help because of family reverses or because they originally miscalculated their own ability to pay their way. Occasionally there is a personal emergency requiring the sympathetic help of the financial aid office. And in a few cases loans for one semester are given to men removed from the scholarship list because their academic records did not come up to requirements, if they appear to be determined to make good.
By far the greatest use of loans, however, is in combination with outright scholarship grants. Especially during the past five years, as indicated by the doubling of the annual amount distributed, student loans have been playing an increasingly important part in the overall financial aid program. Except in the cases of men holding the so-called "name" scholarships (the National, Regional, Club and other special awards which carry a fixed stipend for all four years), scholarship men after the freshman year have been assigned a combination of outright grant and long-term loan to meet their budget deficits. The amount and proportion of each loan is determined flexibly by the financial aid office, but in most cases $200 to $300 of an upperclassman's yearly budget is assigned in the form of a loan. No student is required to take an authorized loan. Some prefer to earn more themselves, to cut expenses, or to obtain more family help rather than borrow from the College. But an increasing number of men are now getting part of their financial aid from the College in the form of long-term loans.
Last year, of the 698 undergraduates receiving aid, 360 had a combination of scholarship and loan and 35 had loans only. Estimates for the present year are that of 760 undergraduates receiving aid, 390 will have a combination of scholarship and loan and 60 will have loans only. The total number of loans has thus grown from 395 to 45.
Up to this year, the policy of combining loans and cash stipends has applied only to upperclassmen, not to freshmen on scholarship. After experimenting last year with the offer of $300 loans to a few nonscholarship freshmen, the Committee on Scholarships and Loans recommended to the Trustees that beginning with the Class of 1960, which entered college this fall, loans to freshmen as well as upperclassmen become a regular part of the financial aid program. This recommendation was adopted.
The central feature of this new policy is an "earnings gap" left in each man's budget as his need for scholarship aid is figured. This gap the student can fill with a combination of earnings: summer earnings, college-year earnings (including Dartmouth Dining Association employment for some men), and future earnings, as represented by College loans. At present, $550 is the amount from earnings that the scholarship recipient is normally expected to provide toward his first-year costs. The Committee on Scholarships and Loans has purposely set this figure at a lever which will enable most freshmen to manage the first year without resorting to loans. The present expectation is that, in step with increased earning power, the gap will be increased to $650 for the sophomore year and to $750 for the junior and senior years.
For the freshman scholarship recipients who are unable to earn the $550 from June to June, who prefer not to work during the college year, whose families feel that they cannot contribute as much as the Committee has calculated, or who have unusual budget items approved by the Committee, College loans up to $300 for the first year are available.
For this first year of the new plan, the freshmen using loans are in the minority. As the plan progresses with the Class of i960 and succeeding classes, it may have the beneficial result of spreading Dartmouth's aid resources over a larger number of needy students. No one can be certain that the program will encourage more work and less borrowing, but it is suspected that it may, and if this turns out to be so, the College then can use its loan funds to assist more non-scholarship men. Because of the developing program for all four undergraduate classes, it is projected that the total annual amount of loans will rise in coming years, possibly to as much as $150,000.
In enlarging the part that loans play in the aid program, the Committee on Scholarships and Loans is well aware that it is not desirable for a senior to graduate with a heavy financial burden to be paid off in future years. The four-year maximum for any one student is now $1200. The loans bear no interest while the recipient is attending ]Dartmouth, but bear simple interest of 3% a year thereafter. Repayments normally are not scheduled to begin until one year after the recipient has completed his formal education at Dartmouth or at graduate school elsewhere.
To obtain a loan the student signs a temporary note and prior to leaving Dartmouth substitutes new notes with specific due dates in accordance with a repayment schedule worked out with the Bursar. The repayment schedule is arranged over varying periods of time, depending upon individual circumstances. The man going into the armed forces and drawing service pay, for example, may start paying $25 a month right away, while a divinity student may pay a modest sum every six months after an initial waiting period of several years.
The repayment record of Dartmouth men awarded loans has generally been good, and under the relatively new system of a definite repayment schedule tailored to the individual's post-graduate situation, it promises to become even better. Handling the business end of the loan program is a big job for the Bursar's office, involving detailed records and much correspondence. Max A. Norton '19, formerly Bursar and now Associate Treasurer of the College, continues in his new position to be responsible for the financial administration of loan collections. Bursar Mason I. Ingram '29 is assisting Mr. Norton in arranging repayment schedules with students before graduation, and is actively supervising the collection of all outstanding loans.
The financial operation of the loan program will reach the ideal point when annual repayments, coupled with other College income for this purpose, provide the funds needed annually to give new loans to deserving students. Then the loan funds in aggregate will be a true revolving fund. As repayments increase year by year, this has more chance of being realized.
The greatest benefactor in providing funds for undergraduate loans is the Dartmouth Educational Association, a nonprofit corporation organized in Massachusetts by a group of alumni in 1896. Its capital has been built up primarily by annual dues of $10 from members. Although operated as a separate revolving fund, loans from it are made only to students approved by the Committee on Scholarships and Loans at the College, and it is an integral part of the overall loan program. In the past four years alone, from dues, gifts, repayments and reserves the Dartmouth Educational Association has provided $112,942 for student loans, and this year its contribution will amount to approximately $28,000. The most recent membership list includes more than 1,000 names.
Thirty-eight other student loan funds are listed in the College catalog, among them fourteen established by alumni clubs and three by alumni classes. Holding a unique place among these funds is the one established by the Dartmouth Women's Club of Boston in 1932. Since then it has been enlarged by annual contributions ranging from $500 to $1,000, and has helped many a needy Dartmouth student to complete his college course.
Dartmouth Men Who Won in the 1956 Elections
Robert K. Hage '35, director od the Office of Financial Aid, who is in charge od Dartmouth's loan program as well as scholarships.
S. Lane Dwinell '28 (R) of Lebanon, N. H.,was reelected Governor of New Hampshireand will serve his second term of two years.
Edgar W. Hiestand '10 (R) of Altadena returns to Congress for a third term as Representative from California's 21st district.
Edwin B. Dooley '26 (R), Mayor of Mamaroneck, N. Y., goes to Congress as Representative from the 26th district, Westchester County.
Two reelected Congressmen, sharing a broadcast, are Thomas B. Curtis '32 (R) of Webster Groves, representing Missouri's 2nd district for a fourth term, and Perkins Bass '34 (R) of Peterboro, returned for a second term by voters in New Hampshire's 2nd district.
EDITOR'S NOTE: It was the intention of the ALUMNI MAGAZINE to tell the story of the Dartmouth Educational Association as a supplement to this article, but space demands of the Fund Issue have made it necessary to delay this until next month.
