Six Figures in Debt for a Master's Degree

Education Secretary Betsy DeVos is betting big on transparency as a solution for high student debt burdens.

New data on program-level borrowing that the Education Department released last month through the College Scorecard shed light on how student debt works and what fields have the highest loan volumes. However, many higher education experts remain skeptical that putting more information into the hands of the public will affect enrollment decisions or tuition prices, especially for the graduate programs where borrowers take out the most loan debt.

That’s in part because there’s little evidence students themselves will use the data, they said, and because price isn't the only factor for students who are choosing a graduate program.

The release of the student borrowing numbers is the first step in the administration’s plans to beef up program-level information on the Scorecard, a consumer tool launched by the Obama administration. Data on earnings associated with college programs are expected later this summer.

The Scorecard information is preliminary and hasn't been checked by institutions themselves. But it to a large extent confirms what researchers already knew about student debt. Graduate programs, it shows, have the highest volumes of student loan debt. It also highlights a number of outlier programs with especially high debt numbers.

The University of Southern California, for example, features the only master’s program in social work where average student borrowing topped $109,000. Social workers tend not to earn high salaries and are therefore likely to spend much more of their income on student loan payments.

Borrowers at more than 200 other programs listed in the Scorecard data borrowed on average less than half that amount. Only three other master's in social work programs -- at DePaul University, Howard University and Capella University -- had average student borrowing of more than $90,000, according to the most recent data.

USC didn't comment on the borrowing numbers in the Scorecard data. But John D. Clapp, interim dean and professor at USC's Suzanne Dworak-Peck School of Social Work, said in a statement that the program is "committed to student and academic excellence, skill development and professional growth."

"In addition to a rigorous, evidence-based curriculum and extensive field internship network, the school offers robust career and professional services to current students and alumni," he said.

In addition, graduates of New York University’s master’s program in film took out an average of more than $176,000 in loans. More than half of master's programs in film/video and photographic arts that appeared in the data, by contrast, had average borrowing levels of $75,000 or less.

A spokesman for NYU declined to comment on the Scorecard data, citing a lack of information about the department's methodology and that a number of programs had borrowing numbers withheld in the new Scorecard because of small student cohorts.

Doug Webber, an associate professor of economics at Temple University, said outlier programs with extraordinarily high student levels likely won’t “paste these data on their department websites.” But he said more information on student lending also won’t move the needle on where students enroll.

“One thing you have to realize is that people don’t apply to that many graduate programs,” Webber said.

The data also showed that students who borrowed the most often weren’t enrolled in the most prestigious programs in their field, said Ben Miller, vice president for postsecondary education at the Center for American Progress.

“If graduate education was more of a market, you would expect to see the most prestigious programs near the top for student debt, and they aren’t,” he said.

Among law schools with the highest average student borrowing, one of the top three, Whittier College, closed recently in part because of poor outcomes. The accreditor for the fourth, Florida Coastal School of Law, last year found the for-profit out compliance with its standards. Florida Coastal subsequently posted improved bar-passage rates and is seeking to convert to a nonprofit.

“I don’t think the consumer is the one that’s going to move the needle here,” said Jason Delisle, a resident fellow at the American Enterprise Institute.

So far, the program-level data have been downloaded only a few hundred times, which suggests the vast majority of prospective students aren't viewing typical loan numbers.

But Delisle said the release of new, more specific borrowing data could force a reckoning at some colleges, including a tougher look at program costs. Public disclosures have prompted some institutions to take drastic steps even absent sanctions. For example, after the Education Department’s gainful-employment rule handed a failing rating to a Harvard University theater program in 2017, the university suspended the program. Many for-profit colleges also cut failing programs before sanctions could go into effect, and some investors aren't eager to invest again in credential-granting programs.

“This information is already available to universities themselves,” Delisle said. “It’s different when everybody else can see it, too.”

The Trump administration argued when it proposed repealing the gainful-employment rule last year that expanding the Scorecard would create improved transparency for higher ed programs.

Webber said that more information, however, is no substitute for regulation.

“We can provide all the information in the world, but is it actually going to get into the hands of the people who need it? And are they going to be able to effectively use that information?” he said.

Debt Picture at Graduate Programs

The new Scorecard data include borrowing numbers for less than a quarter of overall programs, but they reflect loan debt for more than 70 percent of students.

At four-year college programs, the average median debt burden was $23,382 in the 2015-16 and 2016-17 aid years. But larger student borrowing happens at graduate programs, the data show.

Average median debt for master's degrees was $42,335 and for doctoral degrees was $95,715, according to an analysis by Robert Kelchen, assistant professor of higher education at Seton Hall University. For professional programs, the typical debt was more than $141,000.

The graduate programs that produced the highest average debt levels were almost entirely concentrated in medical fields. Among programs where students took out an average of more than $200,000 in student loans, the vast majority were in health sciences.

Nearly half of master’s programs in journalism listed in the Scorecard data produced graduates with more loan debt than the typical master's degree program. For example, journalism graduates from Emerson College, one of the programs with the highest debt levels, left with more than $73,000 in debt.

Michelle Gaseau, a spokeswoman for the college, said the data may not provide a comprehensive picture of student debt. Programs with small student cohorts like the one at Emerson may have varying debt levels from year to year, she said.

Emerson also provides financial counseling to students before they enroll and recently introduced an accelerated master’s degree in journalism to allow students to enter the work force earlier and with less debt.

Although three-quarters of graduates of master’s in education administration programs took out roughly $35,000 or less in student debt, graduates of Strayer University’s master’s program borrowed more than $80,000 on average. Elaine Kincel, a spokeswoman for the university, said the price of the program is just $21,000, however.

“Students have the choice to borrow loan funding above the program cost and may do so for any number of personal reasons,” she said.

“Financial Conundrum” for Colleges

Student aid experts noted that the program-level data, for all the information they reveal about student borrowing, have a number of limitations. Programs with smaller student cohorts were excluded for privacy reasons. And some programs are lumped in with similar ones in the same field. Others are misclassified entirely. Creighton University, for example, appeared to have the highest average borrowing level for any master's in public administration. But a spokeswoman pointed out that the university doesn't offer such a degree. Instead, the Scorecard had counted the debt levels from a master's program open only to law school students.

The usefulness of the information -- to researchers and policy makers as well as students -- still depends on the federal government’s ability to collect and compile accurate data.

And the department previously has experienced mishaps with earlier data releases. When the Scorecard was first launched under the Obama administration, for example, it initially included incorrect student loan repayment rates for colleges.

“It’s the nature of the beast. It’s a learning process,” said Delisle.

But many colleges already are taking a hard look at borrowing on the program level, said Justin Draeger, president of the National Association of Student Financial Aid Administrators.

Those institutions often face a financial conundrum, he said, because of how program subsidies work on campus. High-priced graduate programs in effect often subsidize the affordability of undergraduate degrees.

“The financial model at many universities is so complex that when you start pulling on one thread, it’s awfully hard to disentangle it from all the other programs and threads,” Draeger said.

The other reality for colleges is that they have little control over how much students borrow for graduate degrees. For example, students can borrow up to the full cost of attendance using PLUS loans. Those factors, Draeger said, make potential accountability schemes based on student borrowing an especially challenging proposition.

“These are really complicated things to try to address through policy, which is maybe why we fall back on consumer information disclosure,” he said.