1 in 3 US Grad Schools Leave Students Unable to Keep Up with Debt, New Analysis Finds
FOR IMMEDIATE RELEASE
August 1, 2023
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1 in 3 US Grad Schools Leave Students Unable to Keep Up with Debt, New Analysis Finds
Roughly one in three American graduate schools leave their students owing more in student loans than they originally borrowed, according to a new analysis of U.S. Department of Education data by The HEA Group and Student Defense. At seven of the worst-performing schools—all for-profit or private colleges—students who entered repayment in the 2013-2014 and 2014-2015 school years racked up more than $100 million of excess debt on top of their original loan amount in just five years.
The report finds this disparity is largely due to inflated program costs and borrowers’ inability to keep up with their student loan payments. This comparison, known as the debt-to-earnings ratio, is a common measurement of the value of higher education programs based on students' ability to repay their loans.
“Imagine taking out $200,000 in debt to earn a doctorate and winding up with a $75,000 salary five years after graduation,” said Michael Itzkowitz, HEA Group Founder and President. “That math just doesn’t work. That’s why students are racking up thousands of dollars of interest on top of their original loans. It puts them in a scary situation and, frankly, it’s completely untenable.”
At the top of the list is Walden University’s General Psychology Doctoral Program, where students graduate with a median $175,633 in student loan debt, while their anticipated earnings are just over $72,000. This translates into a 243% debt-to-earnings ratio, leaving the majority of these students under a mountain of debt they’ll likely never pay off, the report says.
The other six schools where students’ collective loan balances have ballooned over $100 million include University of Phoenix, Capella University, Strayer University, Liberty University, DeVry University, and Nova Southeastern University.
“Nobody goes to grad school with the goal of ending up worse-off financially, but that’s what happens when higher ed profiteers lure students in with big promises they’ll never fulfill,” said Student Defense President Aaron Ament. “It shouldn’t be this easy to exploit students’ dreams, and both Congress and the Department of Education have a moral and legal obligation to protect them. We’re again calling for an end to these predatory schemes.”
A full copy of the brief can be found on the HEA Group website.