While many students use a combination of earnings from employment and federal loans to finance their graduate and professional education, there are large discrepancies in how heavily students in different types of programs rely on these funding methods, according to a new paper by the Urban Institute.
The report, Financing Graduate and Professional Education: How Students Pay, found that overall, many master’s degree students fund their education with financial aid and earned income, research doctoral students receive a large amount of institutional aid, and professional degree students tend to take out the most amount of student loans.
Master’s degree students in all sectors tend to cover the cost of their tuition through a combination of grants, federal loans, assistantships and earned income. In the 2011 academic year, full-time master’s degree students took out federal loans to cover 38 percent of the annual budget, or calculated cost of attendance (COA), of public institutions, and 45 percent of the annual budget in the private, nonprofit sector.
Graduates differ from both research doctoral and professional degree students in their heavy reliance on earned income. These students’ earnings from employment covered 42 percent of the budget at public universities, 35 percent of the budget at private, nonprofit universities, and 55 percent at for-profit institutions, according to 2011 data in the report.
While 31 percent of full-time master’s degree students in 2011 reported earning more than $20,000 during the school year, two-thirds of research doctoral and professional degree students reported zero earnings.
Authors Sandy Baum, fellow at the Urban Institute’s Education Policy Program, and Patricia Steele, founder and principal consultant of the research firm Higher Ed Insight, argued that graduates are more likely to have a significant amount of earnings from employment because they are often not enrolled full-time for the full year, unlike research doctoral and professional degree students.
Similar to master’s degree students, research doctoral students cover the costs of their education with loans and earnings. Where they differ is the sizable amount of funding they receive from their institutions through assistantships and institutional grants, which makes them less susceptible to student loan debt. Research doctoral students, in both the public and private sector, “borrowed less than a third as much as research doctoral students in the for-profit sector.”
For research doctoral students, assistantships, such as part-time teaching or research positions, covered 32 percent of the budget at public universities and 20 percent at private institutions in 2011. More than half of these students held assistantships during their schooling, and earned on average more than $20,000.
Research doctoral students also rely heavily on institutional grants, which covered 13 percent of the budget at public universities and and 24 percent at private ones in 2011. Almost 60 percent of full-time research doctoral students received this institutional aid, compared to 27 percent of master’s degree students.
Unlike master’s degree and research doctoral students, full-time professional degree students do not have significant earnings and receive little financial assistance from their institutions. In 2011, 86 percent of professional degree students took out loans, which covered 63 percent of the budget at both public and private institutions. While students borrowed on average $28,150 at public universities and $36,670 at private schools, 22 percent of students borrowed more than $50,000.
Professional degree students even borrowed significantly more than the cost of tuition and fees, which, according to the authors, indicates that these students needed additional funding to cover their living expenses, despite what was incorporated into the COA.
“For many, expected earnings will be high enough to repay their debt without significant strain on their personal budgets,” the authors wrote. “But the variation across programs, institutions and individual circumstances means that some of this debt is likely to be a burden for borrowers, taxpayers or both.”
Publication Date: 1/9/2018