WASHINGTON (CBS DC) — The rapidly swelling cost of student loan debt is not being inflated simply by unaffordable undergraduate and associate degrees as 40 percent of the $1 trillion in outstanding student loan debt paid for expensive post-graduate and professional degrees.
A new report from the New America Foundation’s Education Policy Program finds that median debt loans for graduate school borrowers increased from $40,209 in 2004 to $57,000 by 2012. The median debt amassed for a masters of arts graduate increased to $58,539 from $37,965 over the same period. Borrowers at the 75th percentile of indebtedness saw jumps from $54,000 to $85,000 in inflation-adjusted data from 2004 to 2012.
But the report shows that graduate and professional degrees have rapidly increased their chunk of the U.S. loan debt – 40 percent of the $1 trillion is from such post-graduate programs. And the researchers point out that the distinction is not made between the undergraduate and graduate degree programs adding to overall student debt.
“The jump in graduate school borrowing is bigger than I thought it was going to be,” the report’s author Jason Delisle, director of the Federal Education Budget Project, told CNN. “Are graduate students thinking: I’ve got less money to get a graduate education, so I should borrow more? My employment prospects look worse, so should I borrow more? That’s problematic.”
Separate federal data showed that 41 percent of student loans issued in the fall of 2012 were for graduate loans.
The researchers suggest that many of the nearly 1.7 million graduate school students nationwide – many of whom are still borrowing – are getting degrees that may not even lead to increased salaries.
The study authors note that much of the media and lawmaker coverage of increasingly unaffordable college education focuses on expensive undergraduate and associate degree programs.
“This report is meant to encourage policymakers, the media, students, and others to start examining issues of college access, cost, and student debt only after first distinguishing between graduate education and a more limited definition of “college,” a two-year or four-year postsecondary credential.”
“The recent spike in debt for graduate degrees should also focus policymakers’ attention on the lack of loan limits for students pursuing graduate degrees and income-based repayment programs that include loan forgiveness benefits.”
The research points out that although graduate degrees from the arts, medicine and social sciences all steadily increased in cost– MBA programs held steady from 2004 to 2012. The report also focused more on master’s and professional degrees to point out their explicitly higher costs to student loan borrowers.