graduate school

How do today’s students pay for graduate school?


More and more students believe a graduate degree is essential to their aspirations, but most have to borrow money to finance that degree

The majority of graduate students believe an advanced degree is necessary to their career aspirations, and borrowing money is the top way students are paying for graduate school today, according to a new survey.

Two-thirds of grad students (64 percent) believe an advanced degree is the new minimum standard level of education for any professional occupation, and 95 percent say an advanced degree is necessary to enter, advance, accelerate, or remain competitive in their chosen career, according to “How America Pays for Graduate School,” the study from Sallie Mae and market research company Ipsos.

Fifteen percent of graduate students said they expected a salary increase of $50,000 or more after graduation. Twenty-one percent expected an increase of $20,000-$29,999.

Sixty-three percent of surveyed students said they began a graduate program within one year of their undergrad degree. Fifty-seven attend graduate school full-time and 43 percent attend part-time.

(Next page: Breaking down the different ways students pay for graduate school)

Students spent an average of $24,812 on grad school in academic year 2016-17, and 77 percent paid for it, at least in part, by borrowing. Funds borrowed by students covered more than half of the cost (53 percent), while money students earned, including income and savings, paid for 24 percent. Grants, fellowships, scholarships, and tuition waivers accounted for 15 percent. Eight percent of grad school costs came from funds borrowed or contributed by parents or others.

Federal student loans paid 27 percent of the bill, or $6,853, and private student loans covered 8 percent ($2,077). Half of the grad students who used federal student loans said they expect to receive Public Service Loan Forgiveness after they graduate. Two-thirds of grad students (64 percent) filed a Free Application for Federal Student Aid (FAFSA).

The study reveals that scholarships and grants are far less available for grad students than for undergrads, accounting for just 15 percent of grad school costs. In comparison, the companion study by Sallie Mae and Ipsos, “How America Pays for College 2017,” found that scholarships and grants paid for 35 percent of undergrad costs.

“‘How America Pays for Graduate School’ provides a fascinating contrast to Sallie Mae’s annual ‘How America Pays for College’ study, and finds that graduate students are more results-oriented in their pursuit of a graduate degree, and they expect a return on their investment in the form of a significant jump in their earnings potential,” said Julia Clark, senior vice president, Ipsos public affairs. “As students increasingly regard having a graduate degree as an educational ‘norm’ for professional careers, it will be interesting to see the extent to which employers agree.”

Cost is less of a factor in the final enrollment decision, as more than eight in 10 based their enrollment decision on a school’s academic offerings, prestige, location, campus culture, or other personal consideration. Eight in 10 grad students (80 percent) said they took more responsibility for paying-for-school decisions than they had for their undergraduate studies.

“It is human nature to plan for what you value, and that includes graduate school. Today’s students see graduate school as their ticket to a successful and prosperous career, and most have a plan to pay for their advanced degree before they enroll,” said Raymond J. Quinlan, chairman and chief executive officer, Sallie Mae. “That planning pays off: The overwhelming majority are confident in the financial decisions they’ve made about how to pay for their graduate education.”

“How America Pays for Graduate School” reports the results of 1,597 online interviews Ipsos conducted between May 18 and July 19, 2017, of students age 20 or older enrolled full or part time in graduate school.

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Laura Ascione

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