Report Finds Students at 1 in 3 Graduate Schools Can’t Pay Off Their Debt

The worst-performing schools where students have the highest difference in loan balance five years after starting repayment are all for-profit and private colleges.
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Jessica Bryant
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Jessica Bryant is a higher education analyst and senior data reporter for BestColleges. She covers higher education trends and data, focusing on issues impacting underserved students. She has a BA in journalism and previously worked with the South Fl...
Published on August 4, 2023
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  • At 32% of institutions analyzed in a new report, graduate students owe more than their initial loan amount five years after starting repayment.
  • At seven institutions, graduate students of just two cohorts now owe a combined excess debt of more than $100 million.
  • Students from dentistry programs have some of the highest median debts upon graduation, exceeding $365,000.

An advanced degree is often associated with improved job prospects and higher salaries, but a new report found that many graduate schools are leaving students worse off financially than before they enrolled.

The HEA Group and the National Student Legal Defense Network analyzed recent data from the Department of Education at 1,661 institutions and found that at 32% of analyzed schools students owe more than the initial amount of their loan five years after entering repayment.

"Imagine taking out $200,000 in debt to earn a doctorate and winding up with a $75,000 salary five years after graduation," said HEA Group Founder and President Michael Itzkowitz in a press release.

"That math just doesn’t work. That’s why students are racking up thousands of dollars of interest on top of their original loans. It puts them in a scary situation and, frankly, it’s completely untenable."

At seven of the worst-performing institutions — which are all for-profit and nonprofit private schools — students who entered repayment in 2013-2014 and 2014-2015 now have a combined $100 million in excess debt on top of their original loan amount.

These institutions are Walden University, University of Phoenix, Capella University, Strayer University, Liberty University, DeVry University, and Nova Southeastern University.

Graduate students of these schools in each two-year cohort initially borrowed a combined $584 million to $1.38 billion. They then saw their loan balance increase by 10% to 29% since starting repayment.

At Walden, psychology doctoral students graduate with a median $175,633 in student loan debt while their anticipated median earnings just top $72,000 a year. In total, graduates of Walden in the analyzed two-year cohort have a combined excess loan debt of $289 million.

Even specific programs are landing students with significant debt-to-earnings ratios. The 10 programs with the highest median debt for graduate students are all dentistry programs where median debt upon graduation exceeds $365,000 yet median earnings peak at just under $142,000. Debt-to-earnings ratios for graduates of each program range from approximately 259% to 442%.

"Nobody goes to grad school with the goal of ending up worse-off financially, but that’s what happens when higher ed profiteers lure students in with big promises they'll never fulfill," said Student Defense President Aaron Ament in a press release.

"It shouldn’t be this easy to exploit students' dreams, and both Congress and the Department of Education have a moral and legal obligation to protect them. We're again calling for an end to these predatory schemes."