NCPA - National Center for Policy Analysis

Graduate Students Hold Disproportionate Amount of Student Debt

April 1, 2014

America's surge in student loan debt has been driven by graduate school borrowing, says the Wall Street Journal.

  • In a weak economy -- and with easy government credit -- the debt load for graduate-level borrowers (those graduating with a master's, medical, law or doctoral degree) increased 43 percent between 2004 and 2012, according to a report from the New America Foundation.
  • The median debt load was $57,600 in 2012.

For those pursuing social sciences and humanities degrees (rather than professional degrees), the increase was even higher.

  • For example, a student earning a master's in education had a debt increase of 66 percent (to $50,879) in those years.
  • For students earning a master of arts, their debt increased 54 percent (to $58,539).
  • Bachelor's degree graduates, on the other hand, saw debt increases of 39 percent over the same timeframe (up to $27,000).

The report breaks down total debt by recipient type, showing how much debt is concentrated in the hands of just a few. In the 2012-2013 school year, graduate students constituted only 1 in 6 student loan recipients but held between 30 percent and 40 percent of federal student debt.

What is driving the debt increase?

  • Many households lost large amounts of savings and assets during the recession, leaving students to borrow.
  • Tuition prices have risen, and more students are pursuing advanced degrees than in years past.
  • Additionally, the study notes that a 2006 law removed the graduate student borrowing limit. Previously, graduate students (except for medical students) could borrow only up to $138,500 total for their education, and there were annual limits in place as well. Today, students are allowed to borrow up to the cost of attendance, which includes living expenses and transportation.
  • 1 out of every 4 borrowers who received a graduate degree in 2012 owed at least $99,614 in student loans. Just eight years ago, that figure was $70,907 (in 2012 dollars).
  • And in 2012, 1 in every 10 students leaving with a graduate degree owed at least $153,000 in student debt.

The report's authors call on the president to place tighter limits on student debt forgiveness.

Source: Josh Mitchell, "Grad Students Driving the Growing Debt Burden," Wall Street Journal, March 25, 2014. Jason Delisle, "The Graduate Student Debt Review," New America Foundation, March 25, 2014.


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