Graduate students believe that further schooling is essential to advancing their careers and are paying their own way through master's and professional degree programs, according to a new report by Sallie Mae.
The report, How America Pays for Graduate School, in partnership with Ipsos, a global market research company, analyzed poll results about the myriad of decisions students make when debating whether to enroll in graduate school and found many discrepancies between these results and those from an undergraduate poll featured in the Sallie Mae annual report, How America Pays for College.
Unlike undergraduates, who believe that pursuing a degree is part of achieving the ‘American Dream,’ the study found that graduate students are focused on earning credentials for the purpose of professional growth. Two thirds of graduate students said that an advanced degree is the new minimum level of education required for jobs in their desired fields, and 95 percent said that further schooling is necessary to stay competitive in the job market. The report also found that a little more than half of graduates believe that they will experience a salary increase of $20,000 or greater after graduation.
“Graduate students are more results-oriented in their pursuit of a graduate degree, and they expect a return on their investment in the form of a significant jump in their earnings potential,” Ipsos Senior Vice President Julia Clark said. “As students increasingly regard having a graduate degree as an educational ‘norm’ for professional careers, it will be interesting to see the extent to which employers agree.”
The report found that when it comes to paying for school, graduate students are much more self-sufficient than undergraduates. Unlike undergraduates, who pay for 30 percent of their own schooling, graduate students foot the bill for 77 percent of their expenses, which amounts to an average of $24,812 a year. More than half of graduate students’ costs are covered by borrowing, 15 percent by grants, scholarships and tuition waivers, 24 percent by earnings, and the remaining 8 percent by family contributions.
The poll results indicate graduate students borrow three times more than the amount that undergraduates typically borrow, with their loans comprised of federal loans (27 percent), private loans (8 percent), and university loans (5 percent). Graduates also borrow from outside resources such as student credit cards and student retirement funds. The report also found that half of graduates expected to receive relief on their payments after a certain amount of time through the Public Service Loan Forgiveness (PSLF) program.
Graduate students also contribute an average of $6,007 toward education expenses from their earnings—more than twice the amount that undergraduates contribute. These funds are made up of students’ savings and investments, as well as money from employment and related benefits such as tuition assistance.
Not only are graduates more independent than undergraduates when it comes to funding their education, they also report having better planned for obtaining and allocating money for school. While only 39 percent of families reported that they made detailed arrangements to pay for a member’s undergraduate education before enrolling, three quarters of graduate students said they drafted financial plans before pursuing their advanced degrees. Planning included saving for school before enrolling, researching loan options and grant opportunities, and creating budgets.
“It is human nature to plan for what you value, and that includes graduate school. Today’s students see graduate school as their ticket to a successful and prosperous career, and most have a plan to pay for their advanced degree before they enroll,” Sallie Mae CEO Raymond J. Quinlan said. “That planning pays off: the overwhelming majority are confident in the financial decisions they’ve made about how to pay for their graduate education."
Publication Date: 1/16/2018