Master's Degree Debt and Earnings: New Federal Data Expose Risks for Students and the Government. Research Report

Policymakers enacted a series of reforms in the mid-2000s that significantly expanded benefits in the federal student loan program for students pursuing graduate degrees. These reforms allow students to borrow up to the full cost of attendance for their degrees and use an Income-Driven Repayment (IDR) program that offers loan forgiveness after 20 years of payments or as early as 10 years for those who use the Public Service Loan Forgiveness Program. Despite virtually unlimited access to federal loans and the availability of a generous IDR program, policymakers have done little to prevent institutions from offering high-cost programs and those that consistently leave students with high debts relative to their incomes. To inform the future development of quality assurance policies, this report analyzes debt and earnings data in the Department of Education's College Scorecard for master's degree programs. Although federal loan policies increase access to graduate degrees and the economic payoff they provide, these policies also entail risks for both students and taxpayers. The College Scorecard provides a new source of information that policymakers can use to determine where those risks are greatest and gauge the potential effects of quality assurance policies that target programs where borrowers take on high debt relative to what they can expect to earn with their degrees.