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The Biden-Harris administration is rolling out new legislation that will directly impact graduate education in the United States. I recently read the 775-page report and want to share some information and thoughts for those of us who will be affected.

For the past few years, I’ve been writing and speaking about the future of graduate education, which is directly connected to alumni career outcomes. People pursue graduate education with the goal of building a life they could otherwise not achieve. When alumni struggle to build careers, they doubt the value of their degrees and blame their institutions.

Unfortunately, too many alumni are struggling. Tuition has increased faster than wages, leaving many graduate alumni with unaffordable debt. While graduate students make up only 17 percent of all students, they hold more than 50 percent of the student loan debt. As of 2016 (the last year national data are available),

  • Sixty percent of master’s degree alumni owe student loan debt for their grad degree, and the average loan for a master’s degree is over $60,000. 
  • Forty-eight percent of Ph.D. holders owe student loan debt, with an average of more than $100,000. 

Because of high debt and underemployment, 60 percent of M.B.A.s and 40 percent of master’s programs have a negative return on investment, while 76 percent of non-STEM Ph.D.s also have a negative return. This means that those alumni would be better off financially if they had not gone to graduate school.

In recent years, these factors have led to public skepticism about the value of graduate education, and now enrollments are dipping, even before the enrollment cliff hits in 2025. A recent study by the National Student Clearinghouse Research Center found that graduate enrollment has declined by 2.2 percent this past year.

In fact, the domestic participation rate—the number of Americans with bachelor’s degrees who go on to graduate education—has dropped by 15 percent over the past several years, and universities have increasingly relied on international students to maintain program numbers.

The status quo is not working. Graduate education is in much need of reform, and that reform is coming.

Holding Graduate Programs Accountable

The U.S. Department of Education is stepping in with new regulations designed to hold institutions accountable for the cost of their programs and alumni career outcomes.

Under its financial value transparency framework, the department will publish information about the cost of attending a program, average student loan debt and average earnings of alumni three years after graduation. Universities will be required to direct students to this information prior to enrolling them.

The Department of Education will also calculate a debt-to-earnings ratio for each program. If a graduate program leaves alumni with loan payments greater than 8 percent of net income or 20 percent of discretionary income, the department must notify students that they risk financial harm by enrolling in that program.

The new regulations will have a profound impact on graduate education. I predict at least four significant results.

  1. Students will be able to compare programs and find one that will prepare them for career success. That will spell trouble for programs where alumni do not see a return on investment. Let’s say I’m interested in a master’s degree in public administration and have two offers from different programs. Maybe one program does little to support students and most alumni end up struggling to land jobs, making an average of $30,000 annually in their first few years postgraduation. Another program helps students explore career options and learn effective job-search strategies. Their alumni make an average of $60,000. All things being equal, I’d choose the master’s program that leaves me better off financially.
  2. Career outcomes will increasingly matter, and that will negatively affect doctoral programs. With few academic jobs, many alumni spend several years postgraduation working as adjuncts or in postdoc positions, making a fraction of what they could make if they had gone into the private sector. Outside of a handful of STEM programs, the vast majority of Ph.D.s who leave academia typically land jobs they could have obtained with a bachelor’s or master’s degree and several years of relevant experience. Very few jobs actually require a Ph.D. Doctoral programs in STEM disciplines that encourage students to pursue postdocs will have dramatically lower financial outcomes than programs that provide career support so that students graduate and move directly into industry.
  3. Certificates and master’s degree programs will be less appealing to working professionals. Many master’s programs do not substantially increase a graduate’s earnings. For example, one in-depth study of the return on investment of graduate degrees found that the lifetime earnings pay bump of most M.B.A. programs was only 1 percent after accounting for tuition and opportunity cost. An early-career professional is unlikely to invest several years and take on tens of thousands of dollars in debt to see a slight increase in their salary.

In fact, more companies are dropping degree requirements altogether. Employers value the application of skills and years of experience over credentials. Most undergraduate and graduate programs don’t teach the specific skills and knowledge necessary to be successful in a professional job. A bachelor’s degree is still viewed favorably, as it demonstrates an ability to learn, but beyond that, it is unclear how much employers will value graduate degrees in this new hypercompetitive hiring environment.

  1. Graduate programs that thrive will be those that invest heavily in career support for alumni. I’ve dedicated my career to preparing graduate students for career success, because that was my own lived experience. I grew up in a small, rural town with limited economic opportunities, especially for women. Graduate education was my ticket out of the town and profoundly reshaped my life. It gave me the knowledge and skills I needed to build a middle-class life.

But after I graduated, I struggled. The academic job market had collapsed, and I was ill equipped for a nonacademic job search. My graduate program did nothing to prepare students for nonacademic careers, and no one in my family or community could help me. Underemployed, I deferred my loan payments and ended up owing more than I borrowed. I eventually figured out my career pathway, but it was a significant challenge that came with personal and financial hardships.

My experience is typical of most graduate alumni. In surveys we’ve conducted at the Center for Graduate Career Success, more than 50 percent of respondents say they cannot identify their marketable skills, value to employers or long-term career goals, while 43 percent said they did not know where to start in their job search.

But when graduate alumni know how to build careers, they can succeed.

It will be difficult for graduate programs to substantially lower costs or increase stipends and fellowships. What graduate schools can do is invest in career support to improve alumni career outcomes. Graduate students need access to a comprehensive curriculum to help them explore career options, identify and articulate the added value of their degrees to employers, and learn proven job-search strategies. With thousands of graduate students and postdocs, institutions will need to invest in solutions that can scale.

The new regulations will use average salaries three years after graduation, so investing in career support while students are still attached to the institution will have an outsized impact not only on those students but also on the reputation and future of the institution itself.

L. Maren Wood is the director and CEO of the Center for Graduate Career Success, a mission-driven organization that partners with universities to scale career support for graduate students and postdocs.

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