Study: Graduate school debt could undermine higher ed affordability efforts

Policymakers’ and politicians’ proposals to invest in tuition-free public college and reduce undergraduate borrowing “ignore the ‘staggering’ debt Americans amass in graduate programs,” The Washington Post reports. While graduate programs enroll only 15 percent of students in higher education, they account for 40 percent of federal student loans issued each year. A new report from the Center for American Progress (CAP), a liberal think tank, indicates that, across just one year of graduate school, nearly 25 percent of graduate school borrowers took out more than the lifetime loan limit for dependent undergraduates.

Given the trajectory of graduate school debt, current efforts to improve college affordability could “become inconsequential” if students pursue advanced degrees, The Post writes. CAP cautions that because federal loans for graduate programs are uncapped, schools can “offer credentials with prices far out of line with any reasonable earnings expectation.” A master’s in social work, for example, comes with a median debt of $115,000 and a starting salary of around $50,000.

Inequity in graduate school debt

Rising graduate school debt also has significant equity implications, the researchers say. Nearly 80 percent of Black students took out federal loans for graduate school, compared to 56 percent of white students, Inside Higher Ed writes. The median debt level among Black student borrowers finishing a graduate program is 50 percent higher than that among white student borrowers. CAP points out that “women, Black, and Latinx students often need to earn a credential beyond the bachelor’s degree to receive pay akin to less-educated men and white individuals, respectively.”

Given this context, CAP suggests that any policies that address graduate debt must be nuanced and mindful of the equity implications. 

To rein in graduate school debt, the report recommends creating price caps on graduate programs, more stringent borrowing limits, and penalties for schools that saddle too many students with unbearable debt. It also recommends credential-specific solutions—for instance, prioritizing affordable teaching and social work master’s degrees; moving to two-year law school programs; requiring institutions to better fund doctoral degrees; and expanding the National Health Service Corps, a federal program that covers medical or dental school in exchange for service in underserved communities.

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