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A Talk with Dartmouth's Financial Aid Director

Our guest on Feb. 5, 2002, was Elizabeth Roberto, manager of human resources, training, & development -- and also the financial-aid officer -- for the Tuck School of Business at Dartmouth College (No. 16 on BusinessWeek's 2000 Top 30 B-school list). Roberto was named director of financial aid in July, 1999, after working in the office since 1984. She was interviewed by BusinessWeek Online reporter Mica Schneider. Here's an edited transcript of their discussion:

Q: Upon graduating in 2001, the average Tuck MBA had $46,850 in debt. How long does it take grads to pay back such loans? Does that much debt hinder someone's ability to purchase a home, or to make other large investments after graduation?

A: The majority of students pay it off in five years. That's an indication that they're getting good jobs. Our institutional loans, which are funds loaned out by the Tuck School, must be repaid in 10 years, but most graduates do it in five to seven. They know about managing debt -- we have sessions on that throughout the program, including individual advice. A lot of them do buy homes. They even take luxurious trips before they start work. I don't think that's a concern.

This year is probably a little different than years past, because [there are fewer] jobs due to the economic downturn. But with a job-offer letter, they're usually in a good position to secure loans.

Q: How much money do most new students save for B-school?

A: It can vary. Someone coming from the Peace Corps may not have much saved. Some students might come in with $10,000, others with less.

Q: What percentage of the starting MBA class receives some sort of financial aid?

A: This year it rose significantly, to 72%, from 67% last year. That's because of the [rising] cost of education, and the [weak] economy. We've also become more aggressive with loans and scholarships.

Q: How do the lucky few manage to pay for a Tuck MBA without aid?

A: Some are sponsored by companies. Some have savings or personal funds.

Q: When is the best time to submit Tuck's financial-aid package? Does the early bird get the worm, so to speak?

A: No, as long as it's here by Mar. 1, we're fine, though if you're admitted in January you probably would like to know sooner rather than later what your financial aid will be. But students have an equal chance at scholarship funds.

Q: How soon after being accepted do Tuck students hear about their financial package?

A: We try to do a quick turnaround. It could be two weeks. We have an admitted students' weekend in April, and we work around the clock so that everyone who's coming has their financial package. So when we make our presentation, they know what we're talking about.

We can't move ahead until we have every piece of the financial-aid application. Applicants need to have their taxes filed, and we need a copy of their W-2 plus the application for Tuck School funds. They also have to have their Free Application for Federal Student Aid (FAFSA) by Mar. 1.

Q: Does Tuck offer its MBAs teaching assistantships?

A: We don't. Our program is intense, and students don't have the time.

Q: Can you give us an overview of Tuck's loan options?

A: Sure. The Dartmouth Educational Loan Corp. (DELC) is our institutional loan. We also have the need-based Tuck 5 Percent Loan. [After graduation,] it has a 5 Percent interest rate. We have the Tuck Educational Loan Corp. (TELCO), which gives loans to U.S. citizens and permanent residents. This tends to be a non-need-based loan. Finally, we offer the Tuck International TREE Loan, which is only for non-U.S. students and is considered an institutional loan as well.

Q: How does the Dartmouth Educational Loan Corp. (DELC) work?

A: DELC funds are shared among the various schools -- such as the Dartmouth Medical School and the undergraduate school. We are the biggest participant on campus: Our students borrow the most. Depending on need, a student may borrow up to $80,000 from DELC for their MBA.

The Tuck Educational Loan Corp. is the business school's own loan program. A student may borrow up to $50,000 from this source over the two years of their MBA.

Q: What's the maximum that students can borrow on the Tuck 5 Percent Loan, which as you said is need-based?

A: They can borrow $6,000 per year. That's a unique program, because it's interest-free while the student is enrolled, and has a 5% interest rate [after they graduate], which is similar to the Federal Perkins Loan. Those funds were set up by Tuck years ago, and we make loans depending on the amount that gets repaid [by alumni] -- it's a revolving fund. How quickly that money comes back depends on economic times. We never know how much we'll have available.

Q: How much has been loaned out through the Tuck 5 Percent this year vs. other years?

A: We loaned more this year -- a lot of people repaid. Last year, we loaned $57,500 of the Tuck 5 Percent. This year, we loaned $163,000.

Q: The International TREE Loan is only for MBAs who aren't from the U.S.?

A: Right, and that loan doesn't require a co-signer from the U.S. The first year that we've awarded funds under the International TREE Loan program was 2000. A lot of the international students use this loan. The maximum amount they can borrow per year is $30,000, but the financial-aid committee determines what amount they are eligible for each year, just as we do with our DELC Long-Term Loans.

Q: How does Tuck judge a financial-aid candidate's merit? Are the person's GMAT scores, undergraduate grade point average, and work experience examined?

A: We look at all of it. We also look at the diversity of the class. We want to be sure we have a good representation, and so offer packages that would add to the diversity of the class. Full-tuition scholarships come from our participation with the Consortium for Graduate Study of Management fellowship program, which is for minority students.

We do have other scholarships that are earmarked for minorities, and we're participants with the Robert A. Toigo Foundation, which offers minority students up to $10,000 a year.

Q: Does a person's loan change significantly from one year to the next?

A: No. We do consider that in the second year, they might be a little more needy. So they may get a little more funding in the second year. But generally, it tends to be a similar package, unless someone wins the lottery.

We ask the students at the end of their first year to give us a breakdown of how they have financed their [last academic] year at Tuck. Then we compare the information from the previous year and put together a budget that we feel is appropriate.

Q: Does the money that MBAs make over the summer as interns get factored into their financial aid in the second year?

A: Yes. We have a packet that first-year students fill out before they leave for the summer, and they tell us where they're working, what their rent will be, salary, things like that. Some end up working for a non-profit and can't save anything. Some have minimal savings, and go to New York [for the summer]. A sublet in New York is expensive. Usually around Aug. 1, they find out what their financial aid will be for the second year.

Q: There has been discussion around how international students will fare this year on getting visas. One thing they need to show when applying for a visa is the financial means to get themselves through a degree program. How does that affect your job?

A: Our job is to put together a financial-aid award. We can't finance a whole education. We look at what funds the student has, then make a determination just like we do for U.S. citizens -- deciding what we feel they can contribute. They may get an International TREE Loan, they may get a Tuck 5 Percent Loan, or a scholarship. They may also secure a loan from a private bank.

They'll get a letter from the financial aid office stating that they have been approved to receive X amount of funds. They can use that with their visa application.

Q: What's the most money you've seen someone spend in a year at Tuck?

A: I would say $65,000. That may be someone from another country who might not be able to move furniture and has to buy it.

Our student budget is a single student budget: $55,290. Students who are married with a family need more money. They should add to our student budget $5,000 for a spouse per year, and $3,500 per child. We include in the budget the cost of tuition, instructional materials, and food, housing, and personal expenses, including a computer.

Q: Can your office help the partners of students get jobs in the Hanover, N.H., area?

A: We have been able to work with the Dartmouth Human Resources Office to help. However, Hanover is very different. A Wall Street analyst may not be able to find that niche here.

Q: Tuck has a new 60-person residence hall that was dedicated in December, 2000, called Whittemore Hall. That's good for single students, but what about students with families?

A: We have married-student housing, but Hanover does have a bit of a housing problem. We do what we can to help. If you live right in Hanover, it's fairly expensive. Some homes here go for hundreds of thousands of dollars. If you're out of town a bit, it's a little cheaper. I guess it's typical of any cosmopolitan area.

Q: What can students with families expect to pay in rent?

A: Our married college housing, what we call Sachem Village, averages about $660 per month.

For someone married with two children, the average rent per month at the end of 2001 for non-college [housing] was $904 with an average monthly utility of $150 for a total of $1,054. That's based on a [student] survey.

Q: Any parting advice for people getting ready to pay for an MBA?

A: Get rid of credit-card debt. If people have savings and they have credit-card debt, it's a wash. Be as frugal as you can. You will have a chance to take that last vacation, but it's two years and it's a great experience and the less debt you can come with, the better.

Q: Where should an applicant or admitted student look for more information about financial aid?

A: We're right across from the admissions office. We're available -- we'll work around our schedule to see people. During the admitted students' weekend, our admissions, student-affairs, career-services, and financial-aid offices each have an information session. We have breakfast with them that includes our presentation to the students, followed by office hours with admitted students all afternoon. This year, that weekend is Apr. 11-13.

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