From Classroom to Career: A Closer Look at Students’ Journey After Graduate School

Five years into repayment, students at 24 colleges have accrued more than $25 million in interest, while at one university, balances have increased by $289 million.

At one university, debt have climbed by $289 million after five years of repayment, while students at 24 universities have racked up more than $25 million in interest. (Photo: Inside Higher Ed)

Graduate Student Debt and Repayment

A recent study that looked at student debt and earnings discovered that some graduate degrees put students in worse financial situations.

The National Student Defense Legal Network and The HEA Group, a research and consulting firm focusing on college access and achievement, examined graduate student debt and whether repayment options are available through various US programs.

According to a report, this cycle of students accruing enormous sums of debt—which they will never be able to fully repay—would persist in the absence of checks and balances.

In an article from The HEA Group said that students in a two-year cohort collectively owing more money five years after starting repayment at almost one-third of the 1,661 institutions examined in the review of Education Department data. According to the research, a two-year cohort of students at 24 colleges had accrued interest totaling more than $25 million. For more than 6,300 programs across the institutions, the debt-to-earnings ratios were also provided in the report.

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Colleges Where Students Owing More Than They Had Borrowed

Top of the list of colleges where students collectively owing more than they had borrowed was Walden University, a for-profit institution with more than 40,000 graduate students in the autumn of 2021. According to the report, Walden graduate students who took out loans in 2013–14 and 2014–15 still owing $289 million in debt five years after starting repayment. The graduate student balances at the University of Phoenix, which came in second, had climbed by $235 million. The top 24 institutions include 11 private nonprofits, 9 for-profit businesses, and 4 state institutions. The amount of debt owing per student was not broken down in the study, reports from Inside Higher Ed.

In a report from Third Way said that roughly a quarter of all borrowers of federal student loans in the US are graduate students, who also hold roughly half of the nation’s overall federal student loan volume. Concerns over these students’ soaring balances and the results of graduate school programs have grown among policymakers and campaigners. Itzkowitz used program-level data from graduate schools from the Education Department’s recently updated College Scorecard, which is accessible to the general public.

For the two-year cohort of graduate students at 1,661 institutions and 6,371 graduate programs, the data analysis included student debt and earnings. Itzkowitz calculated the total amount of loans still outstanding after five years at the institution level by dividing the department-provided repayment rate by the total amount of federal loans owing. Using data on median debt and median wages four years after students graduated from the program, the analysis established a debt-to-income ratio for each specific graduate program.

For instance, the data shows that four years after graduating from Walden’s doctorate in psychology program, graduates still owing 243 percent more in student loans than they made during that time.

The department’s proposed gainful-employment rule would apply to graduate programs at for-profit universities as well as non-degree-granting graduate programs at other institutions. The rule is anticipated to be finalized later this year.

The Council of Graduate Schools is pushing for several modifications to the federal student loan program that it claims will increase accessibility for graduate students. Expanding Pell Grant eligibility from 12 to 18 semesters is one of such adjustments, which would enable students to use the money for a graduate or professional degree.

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