PROSPECTIVE STUDENTS trying to weigh whether graduate school is worth the cost may find the information in this article scary – but that’s OK. Maybe it should be, says Ben Miller, vice president of postsecondary education at the Center for American Progress and author of a January report on graduate school debt.
Much federal and legislative attention has historically been paid to the cost of an undergraduate education. But tuition for some two-year, full-time graduate programs can cost more than $100,000, and doctorate or professional programs can cost even more.
To afford tuition and living expenses, students must often take on debt. Loans issued to graduate students account for 40% of all federal student loans issued each year, and these borrowers are subject to practically no limits on borrowing and fewer informational resources, Miller says.
Prospective graduate school students may therefore struggle to make smart financial decisions about the best program in which to enroll.[
READ: U.S. News Releases 2021 Best Graduate Schools Rankings. ]
“It’s a complete black hole of information,” Miller says. “There’s not really great centralized information on pricing, we don’t know anything about graduation rates, net price paid, breakdowns on default rates or repayment rates at the institutional level for graduate borrowers.”
It’s true that on average, individuals with a graduate degree earn more than those with only a bachelor’s degree.
The median earnings for full-time, year-round workers holding bachelor’s degrees was $65,374 in 2018, according to U.S. Census Bureau data. With a master’s degree, median earnings for full-time employees jumped to $80,223. With a doctoral degree, median earnings were $102,315, and the amount for individuals holding a professional degree was $120,515.
But, Miller says, the wide variety in cost and debt by graduate program complicates attempts to determine an advanced degree’s worth.
Graduate school might not be worth the cost for some students in the case of education or social work master’s degrees, for example: According to the Center for American Progress report, a master’s in social work has a median debt of $115,000, while first-year earnings are just $49,400 – an example of when the return on investment may be low, Miller says.
Trends in borrowing at the graduate level continue to paint a bleak picture: While undergraduate borrowing declined from 2010-2011 to 2017-2018, per Miller’s analysis of federal loans, graduate student loan debt grew during that period.
Prospective graduate students should also be aware that the amount typically borrowed can vary by institution type. Student loan borrowers who graduated with a master’s degree had on average $54,500 of debt from attending public schools and $71,900 of debt from attending private nonprofit institutions, according to National Center for Education Statistics data on students who completed graduate degrees in 2015-2016.
Student loan borrowers who graduated with a research doctorate left with an average of $92,200 in debt from attending public schools and an average of $94,100 from attending private nonprofit institutions, NCES found.
For borrowers who graduated with professional doctorate degrees, those numbers jumped into the six figures: Students at public schools graduated with an average of $142,600 in debt and those at private nonprofit institutions graduated with an average of $221,800 in debt. Professional degrees in this case include fields like dentistry, law and medicine. These fields typically have high six-figure salaries, which may make the debt and time spent in graduate school worth the cost for some students.
These averages from NCES do not include students who did not borrow student loans, but do include undergraduate loans that borrowers may have in addition to their graduate debt.[
READ: How Your Existing Student Loan Debt Affects Graduate School Options. ]
Despite the risk of borrowing to pay for graduate school, Jason Wingard, dean of the Columbia University School of Professional Studies in New York, says a graduate education can make good financial sense.
“Grad school can be worth it,” he says. “It depends on the discipline you’re choosing and the curriculum of instruction.”
But he’s critical of graduate programs that fail to evolve and are unresponsive to employer needs. For example, Wingard says good writing skills as defined by a philosophy professor would be different from good writing skills as defined by a marketing manager, and the applied learning model used at the School of Professional Studies helps to better “narrow the gap between employer needs and employee skills.”Play Video
At a traditional graduate program, “you are going to learn to think better, be more critical, you’ll have a network of alumni,” Wingard says. “But in terms of the competencies and the skills you need when you graduate, you won’t have them.”
To relieve costs and avoid debt, students can take advantage of free money for graduate school like scholarships and grants, academic fellowships and tuition assistance programs through their employers. Most graduate students in the 2015-2016 academic year – more than 70% – received some form of financial aid, according to an NCES data analysis from 2019.
All of these options may help tip the scales to make graduate school worth the cost, experts say.[
READ: Use These 5 Strategies to Pay for Graduate School. ]
Prospective students may also want to consider online graduate degrees, which can be costly depending on the program but typically offer flexibility to those who are also working. Coursera, for example, is an online learning platform that offers online graduate degrees in fields like computer science, engineering, business, data science and public health.
“Costs vary for different types of degrees, schools, program lengths, and whether you’re looking at an on-campus or online program. If you’re thinking about applying to grad school, you should have a clear idea of how much a degree program will cost before you apply and whether that is something you can afford – or afford to finance through loans,” Dil Sidhu, Coursera’s chief content officer, wrote in an email. “Also, be sure to check with your employer on any tuition benefits they may offer.”
Students who do not work full time while attending graduate school must also consider the lost earnings during the years they are enrolled, experts say.
“It’s very clear that people need to get some college education, but when it comes to graduate school, people need to stop and ask themselves, why do I want to go to graduate school and what do I want to do?” Miller says. “It’s a lot more expensive and you’re locking yourself into a career path in a way your undergraduate degree doesn’t.”
Remember to ask the following, Miller says: “What is this credential going to allow me to do that I couldn’t have already done? What do I have to make to afford this?”