Is it Worth Pursuing Graduate School? Recent Research Reveals Students Struggle with Overwhelming Debt, Despite ongoing debates about resolving the student debt crisis in the United States, the prevailing belief among Americans remains that attending college is a worthwhile investment. The majority of individuals holding undergraduate degrees are in a better financial position compared to those who did not pursue higher education. However, when it comes to graduate degrees, recent research highlights a concerning trend of students accumulating unmanageable debt while entering job markets with inadequate incomes.
While graduate school typically enhances salary prospects, recent findings have shed light on the issue of mounting debt for many graduate students. A research paper, jointly conducted by the HEA Group, a college access consulting agency, and the National Student Legal Defence Network, analyzed federal data for 1,661 higher education institutions and 6,371 graduate programs.
The study revealed distressing statistics about the financial plight of graduate students:
- Approximately one-third (32%) of the institutions examined reported that their former graduate students owed more on their loans than the original borrowed amount, even five years after entering the repayment period.
- At two dozen institutions, former graduate students accrued over $25 million in interest alone.
- Collectively, graduate programs at several institutions burdened borrowers with more than $100 million in interest after five years. The institutions with the highest figures included Walden University, University of Phoenix, Capella University, Strayer University, Liberty University, DeVry University, and Nova Southeastern University. Notably, most of these institutions were either for-profit colleges or private nonprofits that used to operate as for-profits.
The Biden administration has expressed plans to address this pressing issue by cracking down on colleges that overload their graduates with excessive student debt. One crucial factor contributing to the debt snowball is the higher interest rates on federal graduate student loans compared to those for undergraduates. For the upcoming school year, graduate or professional school students taking out direct unsubsidized loans will face a fixed interest rate of 7.05%.
At many universities, graduate students can typically start repaying some of their interest shortly after completing their programs. However, certain institutions are failing to facilitate this process, resulting in ballooning interest. Often, borrowers find themselves unable to make significant payments, allowing their balances to grow uncontrollably.
The research paper warns about the lack of safeguards preventing students from accumulating excessive debt while earning insufficient income after obtaining their graduate degrees. Without adequate checks and balances in place, this cycle of massive debt with limited repayment potential will likely persist.
Almost two decades ago, a Republican-controlled Congress removed limits on graduate student loans, intending to increase access to graduate education for low- and middle-income individuals. Recently, some Republican senators proposed measures to curb this almost unlimited borrowing power.
In conclusion, the issue of graduate school debt raises questions about the overall worth of pursuing advanced degrees. As policymakers and institutions grapple with potential solutions, addressing the burden of overwhelming debt on graduate students remains a critical challenge.
