Graduate Student Loans: Key Statistics

Thinking about pursuing a master's or PhD but worried about the cost? You're not alone. The journey to an advanced degree is exciting but can be financially challenging. Let's dive into how you can fund your graduate education without getting overwhelmed by debt.

Key takeaways

• Master's graduates average $64,668 in inflation-adjusted debt, while PhD holders owe around $89,526
• Direct PLUS Loans and Grad PLUS Loans are tailored for graduate students, with average balances of $59,722
• Graduate students are now 2.4 times more likely to borrow to fund their education than in 1995, with average debt levels more than 10 times higher

Understanding the average graduate student loan debt

In 2024, the average student loan debt balance among all borrowers was $38,005. While that might seem high, it’s small in comparison to the average balance for master’s graduates at $64,668. PhD holders owe even more at $89,526.

What this data shows is that pursuing advanced education comes with a significantly higher investment than just an undergraduate degree. Depending on your career goals and financial situation, that tradeoff might still be worth it - but you need to weigh the pros and cons carefully.

TuitionHero Tip

Between 2000 and 2016, the average student loan balance for research doctorates doubled from $53,500 to $108,400. That's a pace that outstrips even the cost of housing in some areas!

Exploring types of graduate student loans

So, how can you fund your advanced degree? There are specific loans designed for graduate and professional students. Direct PLUS Loans and Grad PLUS Loans are tailored for graduate students, with an average balance of $59,722. These loans can cover the full cost of attendance minus any other financial aid received. However, they come with higher interest rates and fees compared to undergraduate loans, so it's essential to borrow wisely.

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Dos and don'ts of taking out graduate loans

The bigger picture: total federal graduate debt

As of 2017, the total federal graduate debt stood at a staggering $634 billion. Graduate students make up a significant portion of the overall student debt landscape, accounting for 46% of federal student loan debt and contributing to 39% of new federal student loans.

Graduate students today are borrowing more than ever before. In 2017, they were 2.4 times more likely to borrow for school than in 1995.

Moreover, the average graduate school debt in 2017 was more than 10 times higher than it was in 1995. This surge highlights the growing costs of advanced education and the increasing reliance on loans.

Debt by degree type

Your chosen degree can significantly impact how much debt you accrue:

• Master’s degree holders: Average total debt is $84,203, with $65,667 from graduate school alone.
• PhD holders: Average total debt is $88,368.
• Postbaccalaureate certificate holders: Average total debt is $76,446 at private nonprofit institutions.

It's worth noting that these figures can vary widely depending on the institution and field of study.

Demographics and institutional impact

The total U.S. student loan debt sits at a whopping $1.753 trillion, with federal loans making up 91.2% of this amount. Interestingly, recent trends show a decline in student loan debt over the past few years:

• 2022 to 2024: Total student debt has increased only slightly over this period.
• First Quarter of 2024: 1.22% year-over-year decline.
• Second Quarter of 2024: 0.96% year-over-year decline.

While these decreases are promising, they don't necessarily alleviate the burden on individual borrowers navigating repayment.

Middle-income students are the most likely to take out federal loans, with 58.4% borrowing to fund their education. Among master's degree graduates, 60% carry student loan debt. The likelihood of borrowing also varies by institution type:

• Public institutions: 52.5% of master’s degree graduates owe student loan debt
• Private nonprofit institutions: This figure rises to 53.6%
• Private for-profit institutions: Borrowing is sharply higher at 69%

Each type presents different costs and financial aid opportunities, so it's crucial to consider these factors when choosing where to study.

Tips for minimizing graduate student debt

Reducing your reliance on loans can significantly impact your financial future. Here are some strategies to minimize debt:

• Apply for scholarships and grants: There may be no limit to scholarships you can get, so apply widely to increase your chances.
• Consider work-study programs or assistantships: These positions can offer tuition waivers and stipends, reducing your out-of-pocket expenses.
• Seek employer tuition assistance: Some employers offer funding for employees pursuing advanced degrees related to their field.
• Budget wisely: Understanding your discretionary income can help you manage expenses and avoid unnecessary borrowing.

TuitionHero Tip

Remember, while loans are a common way to finance advanced education, they're not the only option. Scholarships, grants, and work-study programs can also play a vital role in reducing your financial burden. Taking the time to explore all avenues can pay off—literally—in the long run.

Why trust TuitionHero

TuitionHero simplifies navigating graduate student loans by offering insights into average debt, federal and private loan options, and strategies to minimize borrowing. We empower students with actionable advice to fund their advanced degrees while keeping financial goals in check.

Frequently asked questions (FAQ)

What alternative funding options exist besides loans?

Apart from loans, consider scholarships, grants, fellowships, and assistantships. Many universities offer teaching or research assistant positions that provide tuition waivers and stipends. External organizations also fund graduate studies in specific fields. It's worth exploring these options before committing to loans.

How can I manage my graduate student loan debt effectively?

Creating a realistic budget is crucial. Only borrow what you need, and consider your living expenses carefully.

Look into income-driven repayment plans that adjust your monthly payments based on your income. Staying informed about loan terms and repayment options can make managing debt less overwhelming.

Are there loan forgiveness programs for graduate students?

Yes, certain professions qualify for loan forgiveness programs. For example, Public Service Loan Forgiveness (PSLF) forgives remaining debt after 120 qualifying payments for those working in public service jobs. Research if your career path offers such opportunities to reduce your overall debt burden.

What's the difference between federal and private graduate student loans?

Federal student loans typically offer lower interest rates and more flexible repayment options compared to private loans. They don't require a credit check (except for PLUS loans) and may offer benefits like income-driven repayment plans and loan forgiveness programs.

Private student loans, on the other hand, are offered by private lenders and often require a credit check or a co-signer. They may have variable interest rates and fewer flexible repayment options. Understanding the fine print of these loans is essential before committing.

Final thoughts

Pursuing an advanced degree is a bold step toward achieving your professional aspirations. With careful planning and a clear understanding of your funding options, you can navigate the financial aspects confidently and focus on what truly matters: your education and future career.

Source

• Average Graduate Student Loan Debt - Education Data Initiative
• Fast Facts - Graduate programs - National Center for Education Statistics (NCES)
• Student Loan Debt Statistics - Education Data Initiative
• Student Loan Debt Statistics - LendingTree
• Average Student Loan Debt Statistics - BestColleges.com