Misleading: Student loan debt NOT from undergrad degrees

For example, students, families, and taxpayers invest “significant” resources in financing college undergraduate degrees, in large part because a bachelor’s or associate’s degree is a “must for anyone who wants to secure a middle-class income,” explains the report.

If students are taking on unmanageable debt to earn those credentials, then many believe that the “system” isn’t working. However, “we should not draw the same conclusions from debt levels of students who attend graduate and professional school,” says the report, since though this type of degree boosts a student’s earnings prospects and the economy, it “is not the foundation for economic opportunity and middle-class earnings that a two-year or four-year degree now provides.”

The report also states that the higher education system actually aims to underwrite much of the cost and risk that students take on when they pay for an undergraduate education, but this is not the case for graduate programs, since those with an undergrad degree should “be far more informed consumers,” says the report. “Therefore, they shouldn’t need a lot of public support to finance their next credential, which is why there are no Pell Grants for master’s degrees.

Finally, the report emphasizes that the recent spike in graduate degree debt should focus policymaker’s attention to the lack of loan limits for students pursuing these degrees and income-based repayment programs that include loan forgiveness benefits.

“The debt statistics in this New America report suggest that graduate and professional students are likely borrowing at levels that will lead to substantial waves of student loan forgiveness in the coming years,” it concludes. “Policymakers may wish to reexamine if that is the best way the federal government can support our higher education system or whether these policies themselves are to blame for the marked increase in borrowing for graduate and professional degrees in recent years.”

For more information on trends in student borrowing, what institutions are charging for graduate credentials, and debt level statistics, read the report. There’s also the report’s author’s take on the data presented:

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