Check out this survey of the debt level of PhDs. Wow. Lots of 6 figure debt and stories about how people stumble into crippling debt. There were plenty of stories of schools that offer funding for a few years and then cut it off.
41 thoughts on “Grad School Debt”
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Apt. 11d 
This is really interesting. Where did you get it from? I’d like to recommend it to some of my grad students who are considering PhD’s. Some of these numbers are truly astounding — Why do people do that?
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I thought it was fascinating, too. It looks like it was some kind of voluntary survey. I’m kind of confused about how people take out these loans, especially the ones that are 100K +. Who gives out those loans? And, I was thinking 40K/year being a lot to live on as a student, but then realized that most of that money is going to tuition.
I’m seriously troubled by the complicity of the schools in this indebtedness.
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yes to interesting and to seriously troubling.
I found this survey through a link on twitter, but haven’t had a chance to investigate more. I’m finishing off an article today. Maybe this should be the next article.
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It’s interesting to juxtapose the figures on the survey with the figures available from the Bureau of Labor Statistics. Search for “Bureau of Labor Statistics” and the field of concentration, such as history, or English, etc.
The median wage for postsecondary teachers in History is $65,870. There are fewer than 24,000 of them, nationally. For English, $60,040. There are about 73,000 nationally. This would include tenured and non-tenured. How could one repay large loans, once you consider the cost of living, taxes, interest on the loans, having children, health costs, food, gas, etc? What was the plan? Was there a plan?
Just eyeballing the list, it seems the STEM fields are far less likely to get into trouble. I think it’s due to people in those fields having stronger math skills, and thus being less likely to take bad deals. Compound interest is a bad thing when you’re paying off a loan.
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Coupla things here: bait and switch is a strategy used by undergrad and law schools, too: they offer a scholarship and it goes away a year into the program, by which time the student is settled and has friends. Cranberry – at least when I was in school, there were a LOT more jobs/workstudy/fellowships for us STEMmers, on account of the perceived national need. I got my first master’s with no debt at all.
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Yes, a cousin’s child is majoring in a STEM field. The advice he’s getting is that grad school should be paid for–if you have to pay for it, you’re not good enough, i.e., it’s a signal you shouldn’t set your sights on a career in the field.
My eldest is a humanities person, so I’m looking at the list as a parent. In comparison, becoming a writer is a more secure profession than postsecondary teacher–the pay’s marginally lower, but you don’t need a graduate degree to start, thus you don’t have the graduate school tuition debt burden. And there are more writers than postsecondary teachers. High school teacher is also a better deal–and teachers can often complete further degrees at employers’ expense.
How closely do careers in academic fields track with undergraduate grades and GRE scores? Are there people in graduate school who have no realistic hope of securing a position–to the extent that an knowledgeable observer would be able to predict it?
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The advice that you should never pay for grad school is the same in the humanities and social sciences too. I was told if I couldn’t get fully funded at a top 10, or maybe top 20 school to not go, unless I wanted to do it as a hobby and could pay out of pocket for it myself. That’s pretty much the advice you get at any elite undergrad institution, regardless of what discipline you’re going into. The problem is a lot of people aren’t given this advice. It’s similar to information asymmetries for undergraduate education. UMC people tend to have a better sense of what is worth it and what isn’t, and when you have to pay the sticker price and when you don’t, whereas lots of poor people think “college” is a good investment and don’t understand the vast differentials in value.* A fully funded program (tuition, stipend, and health insurance) at the top school in your discipline is still a gamble but a not unreasonable one if you want to be a professor, and if you walk away after 5 years, you’ve not sacrificed all that much. It’s a far cry from going well into debt to get a PhD in a poorly ranked school in your discipline.
Also, depending on the discipline, STEM grad school can be worse than humanities or social sciences. I make a few thousand less a year than the people I know in the STEM sciences, but I have very light teaching responsibilities and don’t have to work in someone else’s lab on someone else’s project. Being paid to do my own research on my own schedule and nothing else (no admin, no teaching, no RAing) if I don’t want to is a luxury not even most professors have. If I chose to take on more teaching and RAing responsibilities, I could earn about what a STEM grad student makes at my school, but still be putting in a fraction of the hours they have to on other people’s projects and obligations.
*Was it here that there was a link to why poor overachieving kids don’t apply to Harvard, even though Harvard will literally pay them to attend, because parents see 50K a year tuition and don’t realize that it doesn’t apply to them?
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Those numbers are a bit shocking. My brother managed to grab a dual PhD in Geoscience and Biogeochemistry without paying a dime out of his own pocket. He wanted to teach, but got a six figure offer from an oil company. He says he can go back to teaching when he retires.
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I’d guess STEM folks don’t have debt because they don’t pay for their degrees & they get stipends.
http://www.wendychao.com/science/stipends/2009-10.html
(People do pay for Masters programs though it’s a questionable choice — foreign students looking to get into grad programs — easier if you are already here, and pre-meds looking to increase their GPAs are the ones likely to pay, but it’s not a good enough risk to take loans for).
I think some of the high debt folks are people in the category Amy mentioned in a previous comment — folks who don’t have good alternatives, but can get into grad school (now, Amy wasn’t recommending taking on non-dischargeable student debt in that circumstance, but I think some do, because it’s a short term solution).
I looked at the US News page on graduate student loans: http://www.usnews.com/education/best-graduate-schools/top-graduate-schools/paying/articles/2013/03/13/explore-graduate-student-loan-options-for-2013
$138K in un-subsidized stafford loans with market rate interest of up to 9.5%, and no deferment of interest. And then, Graduate PLUS loans up to the entire cost of school, at up to 10.5%, including living costs. And then, private student loans. It’s insane and only makes sense for medical school, and I’m not sure that’s going to continue to be true in the future, with the changing health care system.
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“I think some of the high debt folks are people in the category Amy mentioned in a previous comment — folks who don’t have good alternatives, but can get into grad school (now, Amy wasn’t recommending taking on non-dischargeable student debt in that circumstance, but I think some do, because it’s a short term solution).”
The woman I mentioned earlier is in an MA program that she’s taken out loans for and she is going to be applying for doctoral programs that will be free and pay a stipend. I guess the reason she is doing it that way is that she’s hoping to get into a better program.
Interestingly, I know somebody who has done some back-of-the-envelope calculations and apparently, coming in with an MA does not improve outcomes in the local doctoral program. That may not be universally the case, but it is an interesting and very counter-intuitive fact.
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Karen Kelsky started that Google doc yesterday: http://www.slate.com/blogs/browbeat/2014/01/15/phd_debt_project_google_doc_survey_collects_figures_of_graduate_school_debt.html
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Damn. I pitched that article to the Atlantic this afternoon. Too late. shit.
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Laura, have you looked at pitching to OZY? They keep emailing me stuff and it looks pretty good, and I think they support original reporting.
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Here’s the CHE article: http://chronicle.com/article/The-Cost-of-a-PhD-Students/144049/ (not behind the paywall, per Kelsky’s request)
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I’ll check it out, af. I’m cool right now. I have two dependendable places to publish. Well, dependable-ish. But I’m starting to think about publishing articles as a fun hobby. I can’t scale up what I’m doing. If moved to NYC, I could get a staff position, but well… can’t…. So, played around with other ideas this morning.
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The Chronicle article is interesting — adds the idea that the stipends aren’t enough if you have a family, and especially true if you have a family and are in a high cost area (well, and are actually the support for your family, or need to pay for child care). Interesting to think about the folks I know who had children while in grad school (a small minority, in my generation). Several had spouses with full time, full pay jobs, had family support — for issues like illness, or deposits, or other things that require assets. But, they were also careful people who managed their money and made choices to manage their debt.
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I have just been invited to a baby shower of a grad wife who is expecting a fourth baby. (They have an older child with a major health problem that makes daycare undesirable, so I don’t know if the grad wife works.)
Not sure how that works. I do know another grad family that at one point were living just on the dad’s stipend (as a foreign family, the wife couldn’t work) plus help from grandparents. They have two kids in private school.
My husband tells me that it’s not unusual for local stipends to be almost $20k a year. The college claims about $3k in fees, though.
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Even in a low cost area, that seems like not a lot for a family of four. Does she also do subsistence farming?
Area makes such a difference. I know people with about my stipend in NYC who find it hard to live on, and I know people making around my stipend in cheaper areas who’ve bought houses with their stipend. I find my stipend comfortable and have been saving a decent portion of it for the future, but I am fairly frugal, no kids, and don’t have expensive tastes or hobbies. It is true that needs of a 25 YO and 35 YO are different, and that generally funding drops off after the first 5-7 years, meaning you earn the least when you need the most.* My solution has just been to bank as much as possible and pretend like it’s my Nth year funding, which will probably work financially (knock on wood) but is psychologically hard since I don’t like to tap into savings for routine living expenses.
*And the sad thing about income inequality is that even on a grad student stipend I’m better off than 40% of Americans. When I worry about raising kids on my partner and my combined salaries, I realize that we’re pushing median household income for a family of four. There won’t be expensive preschool or designer baby clothes, but if almost half of Americans can raise a family on my current household income, then I can probably do alright.**
**Not that this should be a justification for income inequality or against better conditions for grad students.
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“Even in a low cost area, that seems like not a lot for a family of four. Does she also do subsistence farming?”
It’s a mystery to me. Hopefully there’s some grandparent support and they’ve got a good deal on housing.
The secret sauce to a number of local grad family budgets is that the college has some 2BR/2BA graduate housing units for $500 a month. They’re tiny (a single small sofa in a living room eats up pretty much the entire space), they’re sad-looking, they’re old, they’e in terrible repair, but–$500 a month near campus!
I am a big believer in the power of cheap rent.
“Area makes such a difference. I know people with about my stipend in NYC who find it hard to live on, and I know people making around my stipend in cheaper areas who’ve bought houses with their stipend.”
I know a lot of people who have done that and it can be very tempting, but my husband and I both discourage it.
There was a case some years back before our time where a grad student bought a cute 1920s house in a part of town that had seen better days and eventually left town. He rented it out to another grad family that we knew. The house had a bunch of major repair issues (including some unpleasant sounding plumbing problems), but the renters felt shy about talking to their landlord/friend about the repairs because he was a friend and they knew he didn’t have the money to do anything. The renters moved on and the house was eventually put on the market for around $100k and it sat there for a very long time. What an awful burden for the owner.
For MH–I knew a grad couple in Pittsburgh who bought a lovely house in East Liberty with a wine cellar. I don’t know how that worked out. (For non-Pittsburghers, East Liberty is kind of rough, or it was at the time.)
“I find my stipend comfortable and have been saving a decent portion of it for the future, but I am fairly frugal, no kids, and don’t have expensive tastes or hobbies.”
That’s very good. The B.I. of 10 years from now says thanks!
*And the sad thing about income inequality is that even on a grad student stipend I’m better off than 40% of Americans.”
When my husband and I were both graduate students, it was the highest living standard I had ever enjoyed up to then.
“When I worry about raising kids on my partner and my combined salaries, I realize that we’re pushing median household income for a family of four. There won’t be expensive preschool or designer baby clothes, but if almost half of Americans can raise a family on my current household income, then I can probably do alright.”
The median income works in the median location.
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I saw that at my PhD institution, bj — a lot of male students were trying to support themselves, multiple children, and their wives on their stipend. In fact, every year or so they would argue that the cost of health care for 2 adults and multiple children was impossible to cover with their stipend. Interestingly, most of the PhD students with children split this way: the female students had husbands with fulltime jobs and benefits and the male students had SAHWs (no queer students had children in my time).
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I see a lot of SAH wives of male grad students (some of them manage work-at-home stuff, but I notice that becomes increasingly difficult with both a toddler and a baby). They cloth diaper like mad. A lot of the grad families have been on Medicaid (as the grad health insurance is unsuitable for families as well as unaffordable), and it seems to work a lot better than I would have expected.
I have noticed that the grad student mothers struggle a lot more than the grad student fathers.
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“A lot of the grad families have been on Medicaid (as the grad health insurance is unsuitable for families as well as unaffordable), and it seems to work a lot better than I would have expected. ”
Hmmh.
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The phrase “Texas Medicaid” is not a very enticing one, is it?
I forgot to add that the local grad health insurance is changing under the ACA. The latest word is that there will be some winners and some losers, rather than a clear-cut improvement or decline. The old college policy was the some deal offered to undergraduates, and hence was not very suitable for graduate families. I remember hearing that it was expensive but also didn’t provide good coverage for major medical expenses.
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People who start graduate school are not the same people when they finish grad school. You start grad school at 22, 23, 24. You have no responsibilities. No sense of the future. No family. When you finish 10-12 years later (notice all the big debt people were in school for ages), you are in your thirties. You may have a spouse who isn’t free to move whereever you have a TT job opportunity. Kids are expensive.
I treated my 20s as a throwaway decade. A time to have fun and learn stuff and experiment and find myself. I didn’t think for a second about the future. When really, the 20s is the most important decade. To retire properly, you have to start saving then. Your career decisions in your 20s are nearly impossible to re-do later in your 30s. You can take an apprenticeship or a bottom level job and work your way up in 20s. Harder to do in your 30s. Impossible in your 40s.
One good thing about my lack of seriousness in my 20s is that I did a lot of different things, which were really interesting. I met a lot of great people. I met a lot of jerks, which meant that when I met Steve a few weeks after my 30th birthday, I instantly knew he wasn’t one of them. So, while financially and career-wise I farted away a decade, I don’t have too many regrets.
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Don’t feel too bad about your twenties. I started saving in my twenties. My savings have barely grown at all since my twenties, thanks to the stock market bubble.
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I mean, I’ve saved more. But saving in my twenties didn’t add that much, because I wasn’t making much money, and they basically haven’t compounded at all.
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About the debt–some people may enter doctoral programs specifically as refuge from undergraduate or MA student loans.
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As I continue to think about the debt, it strikes me that part of what’s going on is the expanding opportunity. In the olden days people would have to drop out, say, if they had children. Certainly women, but men, too. I’m guessing that even fairly short times ago, women who had babies as grad students were expected to drop out, and might even have been told so overtly. Men dropped out, too, unless they found a way to not have the baby interfere with their work. Faculty don’t give the paternal (and patronizing) advice that it’s not possible to live in an expensive city, work on your thesis, and pay for childcare, even with what they consider to be a generous stipend (oh, yeah, they are probably forbidden from telling you that). You are given the freedom to figure it out for yourself, and some people do (the success stories, I can think of at least one, if success is counted as the TT position and financial stability). So, people take on debt and hope for the best.
Makes me pretty confused. I started out thinking well, you should only go to a fully funded program and you should live within those means, but, that’s advise for me in my 20’s, married (which meant a second income), planning on delaying children until I was stable, willing to move around the country. What’s the advise for someone in their 30’s, or a single mother, . . . . .?
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“What’s the advise for someone in their 30′s, or a single mother, . . . . .?”
Exactly. I couldn’t, with a straight face, tell a 30-ish/30-something married female grad student to wait until she’s done with her dissertation and gotten a job before having kids, because she could quite easily wind up with neither a career nor a family. But on the other hand, I wouldn’t tell her to hurry up and have kids. I have seen numerous grad dads do just fine, but I have yet to see a grad mom come through with flying colors. It’s early days still (I think my sample is only about three, and two are fairly new mothers), and there are so many more of the grad dads than the grad moms that it’s probably not a fair sample, but it’s quite evident that it’s a very different experience.
(I recently sent an email offering some free babysitting to one of our grad moms who had a baby last year. I haven’t heard back from her–I expect she’s so overwhelmed that she can’t even shovel out her email enough to accept and get help. I understand–my email is about two weeks behind and I’m not trying to write a dissertation.)
I think one of the magic words for grad parents is “low-cost area” or “high-cost area only with spouse with nice job”. (Back in DC, we had at least one married male grad student with a lawyer spouse.)
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A girl in my program had a baby while her husband was in a foreign country trying to get a visa to the US. She presented a a conference 6 days after the baby’s birth. She spent the first year and a half of her child’s life as basically a single mom and wrote her dissertation during that time. After she finished, she got a TT job at a great university in a large city and her husband was able eventually to get a visa and join her and get a job in his field in the city she teaches in. She’s definitely not typical, but it can be done. I have other friends with babies who’ve been alright or are in the process of being alright. It’s a lot easier for men though.
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OTOH, I know of a girl who married a man she met doing her research and had twins. Immediately after he got his greencard he split, leaving her in the most expensive city in the US with twin babies and no source of income. Apparently she is not doing so well financially.
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B.I.,
That twin story is terrible. Is there a way to suspend green cards for unpaid child support?
To add to the grad supermom stories, my MIL gave birth to my future husband as a young married graduate student. She would take him out in a baby carriage and write her MA thesis in the park. Both she and FIL got their doctorates as parents (I think my husband actually hand-numbered the pages for at least one thesis). That was in Eastern Europe. They had one set of grandparents in town, and the grandparents were pretty well off (at least well-off for Poland in the 70s and very early 80s).
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I don’t really agree that you have to start being serious in your 20s. My wife dropped out of college–this is all before I knew her–and drifted, finally graduating at age 26, worked for six years, went to law school, and graduated at age 35 with basically not a penny to her name. Now she is retired with several million (enough to live on without working) in the bank. Admittedly, she slaved at Skadden Arps for eight years in there, where you don’t have enough free time to spend the money they give you, and then worked at a big bank, and we only had one child, and she never had to support a SAH husband or anything, but still. My own 20s weren’t quite as feckless, but I had a net worth of maybe $20,000 on the day I married at age 35, and now I have enough to make retirement credible, if not imminent.
I’d be willing to admit that this pattern works better (or only works for) UMC people with the cultural resources to get on and off the train, but most of the people here, including our hostess, fall into that category.
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I grew up working class and it was fine for me. I wouldn’t trade away my drifting years and am a big supporter of a gap year or years for today’s young people. I’m not worried about retirement – I’ll be fine. The firm I work for hires a lot of people from very good schools who have ticked every box and done everything in order. I’m sure they will all be successful, but talking to them is … boring. I much prefer my colleagues with “unconventional” paths. I put it in parentheses because I think it is less unusual than is being implied in this thread. I know many successful people who didn’t buckle down in their 20s, who didn’t follow the rules about when to have kids and they are living their lives and doing well.
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“My wife dropped out of college–this is all before I knew her–and drifted, finally graduating at age 26, worked for six years, went to law school, and graduated at age 35 with basically not a penny to her name. ”
I like stories of people who didn’t follow the straight and narrow path. I think parents worry about those stories, because they think their kids will decide it’s OK to fail linear algebra (i.e. the Steve Jobs example, or worse, the Bill Gates one for dropping out of college). But, I think the real lesson is that it’s not all over if something goes wrong.
But, I agree that falling off the path is a lot more dangerous for people without resources to back them up. I remember thinking that recently when discussing the 7 Up film series. When you think of the plans each of the kids have, and where they go, what strikes me is that the non-upper class kids do have opportunities, but not if their life takes a wrong turn, sometimes even small wrong turns can take them off track.
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But don’t you think that those people with 200K loans on the spreadsheet have permanently screwed up their lives? There is absolutely NO WAY that they will ever be rid of that debt. They didn’t go to law school in the 1980s. They have a PHD in art history. I can’t imagine a happy ending to those stories.
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Laura said:
“But don’t you think that those people with 200K loans on the spreadsheet have permanently screwed up their lives? There is absolutely NO WAY that they will ever be rid of that debt. They didn’t go to law school in the 1980s. They have a PHD in art history. I can’t imagine a happy ending to those stories.”
Oh my goodness–are there really art history doctorates with $200k in student loans? $200k student loans is only kind of OK for MDs.
For an art history PHD with no prospect of a job that could pay off $200k in loans, I would seriously encourage them to leave the country. (In the good old days, people would do that–Anthony Trollope’s father had to flee to Belgium to avoid arrest for debt.)
http://en.wikipedia.org/wiki/Anthony_Trollope
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What is the track? I think the definition of success is too narrowly defined by UMCs. My family considered me a success long before I reached UMC.
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I took a somewhat unconventional path and it’s worked out ok for me. Went to college, left college, went to cosmetology school, worked in that field for awhile, went back to school and graduated, went to graduate school and finished when I was 27. At the point I finished graduate school, I really wasn’t distinguishable from my grad school peers who had finished college in four years at more prestigious undergrad institutions. I had my first child and then a second a couple of years after finishing grad school and I intentionally plateaued my career while they were young. I’m in my mid-30’s now and I feel like my career is just starting to take steam.
My takeaway from the spreadsheet is that some people 1) still really romanticize the lives of academics and 2) will do as much as they can to avoid working in a real-world, grown-up job. For some of these people, taking out $150k in student loans to complete a PhD in a field they’ll never be able to work in is some sort of bizarre, extended vacation. They know it’s not going to pay off and eventually they’ll be financially screwed but they’re willing to go into extreme debt to delay that reckoning day for as long as possible. I don’t know what the solution is for this kind of person other than to cap the amount of student loans that they can take out.
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I’ve mentioned before the writer at Get Rich Slowly who took out nearly $100k in student loans while getting her doctorate in creative writing. On the one other hand, she emerged with a highly engaging style and a personally rewarding career. On the other hand, $100k for a doctorate in creative writing. (And it was all just while getting the doctorate–she had excellent support for undergrad.)
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Neither my husband nor I had a student loan during grad school, but I have to mention that there was some creeping consumer debt. Toward the end, I remember my husband was getting to be a really talented credit card surfer (those were the glory days of low interest credit cards), although I did not know the term “credit card surfing” at the time. I’m pretty fuzzy on what the actual balances were at the time (I was not then the personal finance ninja that I’ve since become), but they eventually topped at around $10k in DC after he’d got his first real job and we’d had our first two kids. At the time, I was sure that it would be easy to deal with once he got his real job, not realizing the effects of 1) moving to a high cost-of-living area 2) losing one earner and 3) paying for kid stuff.
Although I’m not very clear on what our financial situation was during graduate school (which was a major part of the problem), I think there wasn’t any structural reasons for us not to be able to live within our income then. Once we moved to DC for that first job, there were fairly solid reasons for struggling financially (even with twice the income). In graduate school, though, I was just disorganized and over-optimistic. Fortunately, I didn’t know about the existence of “student loans” to pay for living expenses at the time.
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