When Abigail B. Williams first started graduate school, debt wasn’t on her mind.
Like growing numbers of students beginning graduate programs, she arrived with student-loan debt already, having borrowed thousands of dollars to pay for her undergraduate education. But that didn’t deter her from taking out more loans. At the time, in her early 20s, the loans had the feeling of free money, she says. So as she embarked on a master’s program in social work, she borrowed thousands of dollars more to help pay for her living expenses.
Now, as a third-year Ph.D. student at the University of Michigan at Ann Arbor, Ms. Williams has learned not to take on more debt. For her joint program in social work and psychology, she says she is not borrowing money to supplement her teaching assistantship.
But the damage has been done. She owes a total of $91,600 and wonders if she may have to put off life plans, like buying a home, because of her debt.
“I wasn’t educated on the front end that the decisions I make at age 22 would literally have an impact on me for the rest of my life,” Ms. Williams said. “If I would have had the information that I have now, I definitely would have made different decisions.”
Ms. Williams’s story is becoming more and more common. Graduate-student debt is at an all-time high, experts say. The average amount of education-related debt that doctoral-degree recipients said they accrued in graduate school increased to $14,479 in 2012, a 70-percent increase from a decade earlier, according to National Science Foundation data.
And large proportions of graduate students are taking on large amounts of student-loan debt. Three-quarters of master’s-degree recipients graduate with debt, with an average of $40,000, according to Debra W. Stewart, president of the Council of Graduate Schools. About two-thirds of Ph.D. recipients accumulate debt, with an average of $60,000. The proportion of graduate students carrying undergraduate debt into graduate school, Ms. Stewart said, has doubled, to 40 percent, from the mid-1990s.
Students are increasingly turning to loans to pay for their education as colleges face state budget cuts and other financial pressures that leave them with less money to provide assistantships for graduate students. The poor economy has also affected other traditional sources of money that graduate students have relied on, including fellowships, their parents’ contributions, and their own savings.
The growth in student debt has put pressure on graduate schools to defend the worth of their programs, said Erik Gilbert, associate dean of Arkansas State University’s graduate school.
“What we’re trying to do more than anything is to get people to think about return on investment,” Mr. Gilbert said. “Going $60,000 into debt for a doctorate in physical therapy might be a perfectly economically rational thing to do. Going into an equal amount of debt to get your fourth master’s degree in a field you’re not necessarily interested in pursuing is probably not.”
Measuring Prospects
Faced with students’ rising debt loads, institutions and other groups are responding with more financial-education resources for students as they enter graduate programs, or even consider them.
The Council of Graduate Schools last month unveiled a website, called GradSense, that helps prospective students take some measure of what a graduate degree could be worth and what it might cost. The site provides snapshot views of the median debt of people who pursue specific degrees and of median salaries earned by people in various professions with those degrees. As an example, for a student interested in earning a doctoral degree in arts and humanities and working as a postsecondary teacher in a non-science-and-engineering field, the site’s data reveal a typical median debt of $60,000 and a median annual salary of $63,130.
The council, along with the financial-services provider TIAA-CREF, has given grants of $40,000 each to 15 colleges to develop financial-education programs for students.
“Graduate schools are definitely moving in the direction of providing more transparency to students about the kind of financial investment they’re making in a graduate degree,” said Daniel Denecke, associate vice president for programs and best practices at the Council of Graduate Schools.
Ms. Stewart, the council’s president, said she worries about the ramifications of graduate-student debt being at an all-time high. “There are immediate and consequential risks to our country if the pipeline to graduate school falters,” she said.
“One of the single major reasons why that pipeline might falter is debt,” said Ms. Stewart, adding that “it will have a chilling effect on students’ propensity to go on to graduate school.”
One campus that received a grant from the council was the University of Illinois at Urbana-Champaign. The university is using the grant to hold educational events like a symposium this month covering topics such as “How Can I Pay for Graduate School?” and “Is Graduate School Worth It?”
The university’s graduate college is now working more closely with others on campus, such as the financial-aid office and the dean of students, to provide financial-education resources for undergraduates and graduate students. Financial-literacy experts from those offices are among those speaking at symposiums and workshops.
“There are many people in many offices doing things around campus on this topic,” said Sarah Lubienski, associate dean of the university’s graduate college. “But we weren’t really coordinating the resources we’re giving to students in the area of financial literacy before this grant.”
Rising Debt
Student-loan debt is rising rapidly at campuses across the country.
At the Madison campus of the University of Wisconsin, for example, the average debt for Ph.D. students a decade ago was about $30,000; today it’s about $43,000, said Wendy Crone, the university’s associate dean for graduate education. The amount of student-loan debt held by master’s and doctoral students at Western Michigan University more than doubled over a decade, to $40-million, said Susan Stapleton, dean of the university’s graduate college.
There are large differences between disciplines in the amount of debt that students carry when they leave graduate school. According to National Science Foundation data, less than 3 percent of students who earned a doctorate in engineering and the physical sciences reported having education-related debt greater than $90,000. At the other end, about 10 percent of doctoral recipients in the humanities, 12 percent in education, and 14 percent in the social sciences reported debt greater than $90,000.
Despite the rising level of debt, and increasing concern about it, graduate school still pays off for most people, said Ms. Stewart, of the graduate-school council.
Over the course of a career, people with a master’s degree earn, on average, almost 20 percent more than those with only a bachelor’s degree, she said. Ph.D. recipients, on average, earn 45 percent more than those with just a bachelor’s degree.
Ms. Williams, the University of Michigan student, said she’s glad that some universities have begun providing better financial information so that future students have a better chance of avoiding the level of debt she faces. Six months after she finishes her doctorate, she will have to start paying $900 a month to pay off her loans.
“If I had to do it all over again,” Ms. Williams said, “let’s just put it like this: When I think of having children, I think of them not going to graduate school.”
