By Annie Wood
November 20, 2014
Caption : A very small population of students carries the largest student debt burden in the country: Grad students.     

A very large chunk of this country’s student loan debt belongs to a very small group of borrowers. While 40 million Americans have over $1.2 trillion in debt collectively, just 14 percent of college students hold just about 40 percent of the debt. Who are these borrowers? Graduate students.

Many graduate students like Anthony Manfre scoff at their undergraduate debt in retrospect. Manfre, an Army veteran who was able to pay for most of his undergraduate degree with GI funds, was only $4,000 in debt before graduate school. “At the time, I thought that was a lot,” he said, but it is nothing compared to the $200,000 he has picked up in pursuit of a doctorate in marriage and family therapy.

Graduate school is seen as a worthwhile investment because it should pay off in higher-up jobs that offer better salaries. For Manfre, a $61,500 a year salary doesn’t allow him to begin to tackle his heaps of debt.

The most common narrative of the student debt crisis focuses on undergraduate students taking out larger and larger loans to pay for the escalating cost of college. While the price tag of attending college has risen 1,120 percent since 1978, there is a student debt problem not even being talked about. Graduate students are largely funding their education on their own, without parents’ financial help or other sources, and have almost no limits when it comes to borrowing.

Some experts on student loan debt like Joel Best, a professor at the University of Delaware, says much of the dialogue about student debt focuses on undergraduates because there are far more of them, and they are new to the whole grown-up finances thing: “They’re younger and more naive,” Best told Jon Marcus of the Hechinger Report.

Best says the paradigm focusing on student loan debt among the younger, undergraduate set of students allows graduate programs to hike up prices without much resistance. It has also left lawmakers open to raising interest rates on loans for professional and graduate students to 50 percent higher than undergrad rates.

Most graduate students are beyond parents’ help on things like tuition, room and board, and living costs, and therefore take out nearly three times as much in loans as undergraduates. Although debt has doubled for undergraduate students since 1989, the Brookings Institution found that debt has more than quadrupled during those years.

Some argue that the financial burden of graduate school rests entirely on the student, particularly since it is seen as gratuitous, and possibly not worth the cost. However, the Bureau of Labor Statistics predicts that the fastest-growing careers through 2022 will require graduate degrees as a prerequisite.

It is widely assumed that those who seek graduate or professional degrees can pay them off. Even President Obama largely left graduate students out of his Executive Order in June that expanded income-based repayment of student loans. Referring to those indebted due to graduate degrees, the President asserted, “If you got a professional degree like a law degree, you would probably be able to pay it off.” Perhaps if we’re talking about a Harvard Law degree, but what about a master’s in education who goes on to work in a public school?

Graduate school debt is not the most widespread kind of debt, but the fact that such a large portion of student loan debt in this country belongs to such a small population of college students is not to be ignored. While it is easy to dismiss this as a personal problem or that these students don’t really need these degrees, the truth is that the demand for higher degrees is growing. This population of borrowers can no longer be ignored in policy regarding student loan debt; our country relies on those with graduate and professional degrees to move our country forward.

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