Many students end up accumulating significant debt instead of reaping benefits from their degrees, according to a recent report by the HEA Group, a research agency focusing on college access.
Going to grad school may not always be a wise financial decision
The report, based on an analysis of more than 1,600 institutions going to grad school, revealed that approximately 32% of these schools had students who owed more on their loans than their initial borrowing, even five years after entering loan repayment. This suggests that these borrowers were not earning enough money after going to grad school to make substantial payments and prevent their balances from growing.
Notably, some graduate programs from various institutions collectively generated over $100 million in interest payments within five years. The study also highlighted a concerning trend, today’s graduate students are three times more likely to borrow for their education compared to their counterparts in 1995. Additionally, the average going to grad school debt has surged to more than ten times its 1995 level.
Among the institutions with high debt-to-earnings ratios, the HEA Group pointed out Walden University, University of Phoenix, Capella University, Strayer University, Liberty University, Nova Southeastern University, and DeVry University.
Institutions with high debt-to-earnings ratios
Specifically, Walden University’s Psychology doctoral degree program topped the list with a debt-to-earnings ratio of 243.3%, followed by their Curriculum and Instruction graduate certificate program with 196.4%, and the Mental and Social Health Services master’s degree with 161.3%. Meanwhile, the University of Phoenix’s Educational Administration and Supervision doctoral degree program had a ratio of 104.1%, while their Curriculum and Instruction doctoral degree program recorded 103.5%.
For prospective graduate students going to grad school planning to take out direct unsubsidized loans in the upcoming academic year, the Education Department announced a fixed interest rate of 7.05%, applicable to loans taken out after July 1, 2023. With the increasing debt burden faced by graduates, it’s essential for students to carefully assess the financial implications of pursuing advanced degrees.
READ ALSO: Interest Rate Hike Boosts Treasury Bill Yields To Record Levels
Leave a Reply