Neal Hutchins Lockhart is really a business and finance executive and writes for various online publications. In the article below, Neal Hutchins Lockhart explains why and how some colleges are removing student education loans from financial aid programs.
In an unexpected turn of events, Dartmouth College has joined the ranks of several other public and private universities in eliminating student education loans, says Neal Hutchins Lockhart. At first glance, it may appear that this decision will disenfranchise thousands of students unable to afford the high fees to attend post-secondary school. However, Dartmouth's decision comes at any given time when millions of Americans are struggling with student loan debt.
By eliminating the potential of student education loans, Dartmouth wishes to help its student body by canceling the burden of debt. Neal Hutchins Lockhart requires a moment to understand more about the way it works and determine what Dartmouth has up its sleeves to allow non-wealthy students to attend its prestigious institution.
What really happened?
With recent headlines reading \”Dartmouth Abolish Student education loans,\” it's not hard to assume the Ivy League school is banning the practice altogether. That's not entirely true, says Neal Hutchins Lockhart. What really happened was that Dartmouth issued an argument announcing that they would be removing student education loans from undergraduate educational funding programs for students from families earning more than $125,000 a year.
The announcement came following the university previously eliminated student loan requirements for families earning less than $125,000 annually. However, graduate and post-graduate students it's still able to access student loans, as will wealthier people who find affordable to repay them, says Neal Hutchins Lockhart.
Dartmouth's decision is intended to protect all undergraduates and is likely to save graduates about $5,500 indebted each year.
How Dartmouth intends to provide financial aid
Considering the vast majority of university students take out loans to pay for the amount, then one has to wonder how Dartmouth will give you educational funding to low-income students. As a part of its statement, Dartmouth explained that it will now begin expanding its scholarship program and it has increased the wages cap for full scholarships to $125,000, says Neal Hutchins Lockhart.
Their decision is backed by approximately $80 million provided by 65 donors. With this money, the university should become one of the first to offer full scholarship programs to many of their students, says Neal Hutchins Lockhart.
The education loan crisis changes politics
Neal Hutchins Lockhart states that over the past 2 decades, a student loan crisis has turned into a major issue impacting the lives of countless young Americans. By now, the typical student will graduate with around $33,000 indebted before beginning their the first. With this type of financial burden, the default rate on these loans rose to 11%.
These student loans create not only a debt crisis, based on Neal Hutchins Lockhart. For young workers at the beginning of their careers, such crushing debt has already established a substantial impact on their ability to buy a house, start a business and save for retirement. Coupled with inflation and rapidly rising house prices, analysts predict millennials may never possess a home.
According to Neal Hutchins Lockhart, Dartmouth's decision to get rid of undergraduate student loans is intended to combat these effects. As probably the most prestigious universities on the planet, it can set a new standard for what is suitable and shift the policy from crippling student education loans to donor-supported scholarships for those students.
Dartmouth is just the tip from the iceberg
Although Dartmouth has received probably the most attention in recent days, it is just the most recent school to join the trend of universities eliminating student education loans. Neal Hutchins Lockhart explains that from small private schools, like Williams College in Massachusetts, to large public schools, like The Ohio State University, many higher education institutions are making the difficult decision to fight rising debt student.
Of course, eliminating student education loans presents some challenges, says Neal Hutchins Lockhart. Most importantly, it is expensive. Many schools that have decided to achieve this have large endowments or may attract the interest of monetary donors.
While an Ivy League college, like Princeton or Dartmouth, can attract huge amount of money in private funding, smaller regional schools can struggle, says Neal Hutchins Lockhart.
In such cases, it'll likely rely on a choice by the federal government before anything really changes. The Biden administration arrived to office promising to tackle student debt, but little continues to be done so far, says Neal Hutchins Lockhart. Analysts the president's $25 billion campaign pledge will likely come into play inside a month or two, but, for the time being, it remains invisible.
The essential
Dartmouth's decision to get rid of student loans from its educational funding programs is a direct reaction to America's student debt crisis. If successful, it might bring about policy change and spur other institutions to offer more comprehensive scholarships to any or all students, says Neal Hutchins Lockhart.
