NYT: Biggest Offender in Outsize Debt: Graduate Schools

[Celerity]

The market for master’s degrees behaves in strange and erratic ways, new data reveals.

https://www.nytimes.com/2019/06/03/upshot/student-debt-big-culprit-graduate-school.html?action=click&module=Top%20Stories&pgtype=Homepage

The signs are hard to miss in downtown San Francisco: two stylized A's inside a red circle, symbolizing the Academy of Art University. The for-profit school occupies more than 40 buildings throughout the city and has made its family owners very rich.

Where does the Academy of Art’s money come from? About $100 million per year arrives as tuition and fees financed by federal student loans. The full scope of the borrowing was revealed May 21, when, for the first time, the Department of Education released information about how much debt students are taking on to earn degrees from various academic programs at American colleges and universities.

The data shows one sector in particular with outsize debt: graduate school. And while the Academy of Art fosters unusually high burdens, many public universities and nonprofit schools have also gotten into the debt-fueled graduate school business.

In releasing the college loan data, Education Secretary Betsy DeVos described it as part of President Trump’s executive order to address the student debt crisis. Access to the loan amounts, she said, will allow students to make informed decisions about choosing colleges. At the same time, the department is preparing to uproot the Obama administration’s approach to the debt crisis, by repealing regulations that cut college programs out of the federal financial aid system if students don’t earn enough money to pay their loans back.

Within the graduate school sector, the fast-growing master’s degree market is replete with debt levels that make little sense. An accredited university can essentially create a master’s degree in anything, set whatever price it likes, start signing up students for federal loans, and market the program as “accredited.”

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[PoindexterOglethorpe]

1. So true.

But it's also incredibly frustrating that so many young people don't do any research about what different schools actually cost. Or if a graduate degree in a field even makes sense. Or how many jobs are out there at the end of all that schooling.

I'm the first one to tell a young person to go ahead and major in what they love. But do NOT lose sight of the fact that at the end you'll need to make a living/get a job and keep that part of it firmly in mind.

[pnwmom]

2. For undergraduate degrees, people with humanities degrees do better than business degrees.

But, yes, there is a diminishing return on most advanced degrees. An MBA, however, is worth more than a BA in business.

And an MD is worth more than a BA or BS in biology.

[PoindexterOglethorpe]

3. And the other thing, when it comes to graduate degrees,

is that people in STEM generally don't have to pay at all for their graduate degrees. It's pretty astonishing. My Son the Astronomer is in a PHD program in his field. His tuition has been waived. He has a research assistanceship that pays a stipend that, while not enough to cover everything because he's in the Washington DC area, means that (thanks to generous grandparents) he will have no debt. And even if he weren't so fortunate this way, he'd be undertaking very little debt. In some parts of the country the stipends for TA or RA positions really do cover everything.

But your point about specific degrees is spot on.

I really hope we move to public colleges and universities being free or very nearly so in the near future. That might also go a long way towards young people not being bamboozled by the for profit schools.

[pnwmom]

4. Yes -- one of my children has a STEM Ph D that was fully paid for by a fellowship.

They should have more of those for MD's. So much of the problem with medical costs is doctors begin their practices with astronomical loan debt, so they don't want to enter lower pay specialties like internal medicine.

[PoindexterOglethorpe]

5. I agree.

Medical school should be free or close to it. Among the reasons very few doctors want to practice in small towns or in rural areas is that they can't make very much money in those places. So hospitals in such places are shutting down. If doctors could finish their training debt free or very nearly so they could make very different choices about what specialty to go into, or where to practice.