Paul L. Caron

Saturday, July 10, 2021

WSJ: Some Elite Master’s Degrees Leave Graduates ‘Financially Hobbled For Life.’  What About JDs?

Wall Street Journal, ‘Financially Hobbled for Life’: The Elite Master’s Degrees That Don’t Pay Off:

Columbia University Logo (2021)Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000.

Yet two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year.

The Columbia program offers the most extreme example of how elite universities in recent years have awarded thousands of master’s degrees that don’t provide graduates enough early career earnings to begin paying down their federal student loans, according to a Wall Street Journal analysis of Education Department data. ...

Lured by the aura of degrees from top-flight institutions, many master’s students at universities across the U.S. took on debt beyond what their pay would support, the Journal analysis of federal data on borrowers found. At Columbia, such students graduated from programs including history, social work and architecture. ...

At New York University, graduates with a master’s degree in publishing borrowed a median $116,000 and had an annual median income of $42,000 two years after the program, the data on recent borrowers show. At Northwestern University, half of those who earned degrees in speech-language pathology borrowed $148,000 or more, and the graduates had a median income of $60,000 two years later. Graduates of the University of Southern California’s marriage and family counseling program borrowed a median $124,000 and half earned $50,000 or less over the same period. ...

Undergraduate students for years have faced ballooning loan balances. But now it is graduate students who are accruing the most onerous debt loads. Unlike undergraduate loans, the federal Grad Plus loan program has no fixed limit on how much grad students can borrow—money that can be used for tuition, fees and living expenses. ...

The no-limit loans make master’s degrees a gold mine for universities, which have expanded graduate-school offerings since Congress created Grad Plus in 2005. Graduate students are for the first time on track to have borrowed as much as undergraduates in the 2020-21 academic year, federal loan data show.

“There’s always those 2 a.m. panic attacks where you’re thinking, ‘How the hell am I ever going to pay this off?’ ” said 29-year-old Zack Morrison, of New Jersey, who earned a Master of Fine Arts in film from Columbia in 2018 and praised the quality of the program. His graduate school loan balance now stands at nearly $300,000, including accrued interest. He has been earning between $30,000 and $50,000 a year from work as a Hollywood assistant and such side gigs as commercial video production and photography.

Highly selective universities have benefited from free-flowing federal loan money, and with demand for spots far exceeding supply, the schools have been able to raise tuition largely unchecked. The power of legacy branding lets prestigious universities say, in effect, that their degrees are worth whatever they charge. ...

At least 43% of the people who recently took out loans for master’s degrees at elite private universities hadn’t paid down any of their original debt or were behind on payments roughly two years after graduation, the available data show.

Universities, which receive their tuition up front, have an economic incentive to expand graduate degree programs and face no consequences if students can’t afford to pay the federal loans after they leave. ...

One foreign student said he notified School of the Arts officials in 2016 that he may need to drop out of the film program because he could no longer afford tuition and living expenses. International students aren’t eligible for federal loans. He received an email that August from an administrator.

“I was informed that you might be interested in additional on-campus work opportunities,” said the message, viewed by the Journal. “We were contacted by the Office of President Bollinger who hires students for dog caretaking.”

Mr. Bollinger said he didn’t know about or condone officials making the offer in response to the student’s situation. He said the job of caring for his yellow Labradors, Arthur and Lucy, while he traveled was intended to give students pocket money and wasn’t meant to address serious financial need.


Applying the same analysis to JD degrees, 22 (out of 202) law schools have a debt-to-income ratio of 1.00 or less. No law school has a ratio as high as Columbia's Film/Video and Photographic Arts MFA (6.0). Eight law schools have a debt-to-income ratio as high as Columbia's Drama/Theatre Arts and Stagecraft MFA (4.0).

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