The Great Master’s-Degree Swindle

In 2013 I wrote a Chronicle column about the University of Pennsylvania’s Master of Applied Positive Psychology program.

I chose the MAPP program because it sent me some goofy unsolicited marketing emails, so, fair game! And it represented trends I thought were important: Famous universities were using the unregulated, debt-financed master’s-degree market to exploit brand names that were incredibly valuable in theory but tricky to monetize in practice.

Notably, MAPP is not offered by Penn’s highly ranked psychology department. “Positive Psychologist” isn’t an actual job. The program mostly seems to teach people who already have jobs the tenets of Professor Martin Seligman’s extremely popular and controversial theories about the power of positive thinking, which have been described by critics as closer to a religion or self-help regime than a legitimate academic field.

I made sure to emphasize that the one-year MAPP program, which required students to be on campus for a single weekend per month, cost over $45,000. It seemed like a lot of money at the time.

Much has happened in the eight years since. The long-term decline in undergraduate enrollment sent university business managers hunting for other sources of revenue. Public financial support for higher education in some states never recovered from the aftermath of the Great Recession. Universities increasingly partnered with for-profit firms to launch expensive online master’s programs, sharing tuition with corporations listed on the Nasdaq. Much of it was financed with federal student loans that swelled to $1.6 trillion outstanding.

And in a testament to the power and influence of opinion columnists, the MAPP program looked on the bright side and increased tuition and fees to $71,662.

Way back when, it was hard to know if a given master’s degree provided any real value to students. Then the U.S. Department of Education released a database of debt and earnings information for graduate programs. Last month, The Wall Street Journal used the data to expose Ivy League programs that offered a terrible return on borrowed investment. Film students at Columbia were typically borrowing $181,000 apiece before entering a job market that pays less than $30,000 per year.

People who assume world-famous universities wouldn’t exploit naïve students were shocked. People who know better because they work in academe got defensive: Many master’s programs are affordable and lead to good jobs, they noted.

Sure. #Notallmastersdegrees. Most police officers don’t wantonly beat up and murder their constituents. We still have a police-brutality problem.

The question is how long the proliferation of questionable master’s programs is going to last, and what might happen if the higher-education industry doesn’t get it under control.

The Department of Education database lists more than 44,000 master’s programs, a testament to how graduate school has become a common way station for many career paths — and how aggressively universities have moved into the market, searching for profits.

Most programs are too small to yield debt-and-earnings information that meets the department’s strict privacy thresholds. Scroll through the rest and the most obvious patterns are around types of programs as much as types of institutions. Some observations:

Borrowing $118,000 to become an acupuncturist who earns $18,000 a year may not be a wise financial decision. I’m looking at you, Emperor’s College of Traditional Oriental Medicine.

The whole apparatus of university-based arts education is a financial catastrophe for students. Taking on loads of debt to train for a profession that is commonly modified by the word “starving” is a terrible idea, and it doesn’t really matter what kind of college is involved. For-profit, nonprofit, public — the numbers are awful. Columbia got dinged because it’s Columbia, but film-studies programs at other universities don’t look much better.

Visual and performing arts: bad. Fine and studio arts: bad. Drama and theater: bad. I’m sure colleges will say that arts training is time- and labor-intensive, and I’m sure they’re right. But that doesn’t excuse them from moral responsibility for their position in a system that puts 100 percent of the financial risk on young people who may not be that financially oriented to begin with.

It’s not great that Penn has a program that costs approximately $71,562 more than the price of ordering some of Martin Seligman’s books from Amazon. But a lot of real psychology programs have problems, too. Students are borrowing doctor money for therapist wages. Northwestern has a clinical psychology master’s program with median debt of $142,000 and median earnings of only $43,000. Others aren’t that bad, but they’re still bad.

In some fields, the type of college matters a lot. If you want an affordable accounting degree that leads to a well-paying first job, go to a public or nonprofit university. If you want to pay more and get less, go to a for-profit school like DeVry or the University of Phoenix.

Jason Hoffman for The Chronicle

Many colleges and universities have been around for so long, it’s easy to see them as the most stable of institutions. But there’s a volatility inherent to serving a public mission while competing in a private market. Most college administrators and professors I know are genuinely committed to students and scholarship. They also have bills to pay and expensive things they want to buy.

The master’s degree market has been destabilized by several factors that converged around the same time. Unlimited federal borrowing for graduate school came in 2005. The economy crashed three years later, followed shortly by the crest of the millennial enrollment wave. Meanwhile, advances in online pedagogy and internet technologies made it possible to create fully online programs that were good enough to stand behind — and sell to anyone in the world.

Master’s degrees are also the credentials least bound by historical norms, government regulation, or, in many cases, professional bodies. Ph.D.s are controlled by the faculty. Bachelor’s degrees are hard-set in form and function and colleges have to publicly report their admissions selectivity and incoming test scores. They’re also subject to strict federal borrowing limits.

But while some master’s degrees are wired into professional licensure or well-established labor market standards, many others aren’t. That’s the soft part of the system that colleges have learned to exploit. Public universities at least have to get state or system approval for new programs. Nonprofits can essentially conjure up a master’s degree in anything, charge whatever they like, and be exempt from government rules that target for-profit colleges.

All of this might continue to run smoothly, immune from the occasional news investigation and cranky columnist, except for one thing: Those graduate students loading up on federal debt are increasingly paying their loans back using income-based repayment plans. That puts them on track to have their loans forgiven after 10 or 20 years, depending on their career, and that means the bill for all these dubious master’s programs will ultimately fall on the federal taxpayer.

Two policy responses are likely. First, an end to unlimited borrowing and loan forgiveness for graduate school, which would hit the virtuous and the guilty alike. Students enrolled in expensive programs would have to borrow from the private market, most likely on worse terms than federal loans. Access to graduate school would diminish, but so would students’ ability to make poor financial decisions. Without a blank check from the bank of Uncle Sam, grad schools might take tuition increases off autopilot.

Second, an expansion of the income- and debt-based regulations that the Obama administration originally applied to for-profit colleges, and which the Biden administration is working to revive. Most master’s programs are, for all intents and purposes, for-profit, regardless of who technically runs them. Regulations that disqualify programs with high debt and low earnings from receiving federal aid would force universities to reappraise master’s degrees that frequently leave graduates in dire straits.

The master’s degree party hasn’t ended yet. But the more universities put their short-term financial interests above student well-being, the sooner it will.