The decision to go to graduate school isn’t one to take lightly. Attending graduate school means taking on added tuition. And if you haven’t even finished paying off your student loans from your undergraduate studies, you may be hesitant to take on even more debt.
Still, for many people, a graduate degree opens the door to more career opportunities. And you may find that having that degree allows you to boost your earnings substantially. That could be enough to justify the cost — and the burden — of added student loans.
But a new report from the U.S. Department of Education uncovers some unsettling trends in the context of federal student loans and graduate school. And you may want to give it a read before signing up for extra loans on top of the ones you might already have.
Is all of that added debt really worth it?
In some cases, the debt associated with a graduate degree might pale in comparison to the earnings potential it leads to. Borrowing $60,000 for an MBA that results in an annual salary of $200,000 or more for decades could easily read like a no-brainer.
But the aforementioned report is quick to highlight that the student debt accrued in the course of a graduate degree doesn’t always pay off. Specifically, the report said, “The amount students pay for post-secondary credentials is often only weakly connected to the labor market payoff for the credentials they earn. A particular worry is that too many students take outsized loans relative to what they will likely be able to repay based on the typical earnings of graduates in a program.”
The report then goes on to say that 12% of master’s degree programs offered by private non-profit institutions and about 25% of programs at for-profit institutions have high debt burdens relative to resulting salaries. That’s clearly unsettling.
