Inequality and Opportunity in a Perfect Storm of Graduate Student Debt

Abstract

Recent efforts to understand aggregate student loan debt have shifted the focus away from undergraduate borrowing and toward dramatically rising debt among graduate and professional students. We suggest educational debt plays a key role in social stratification by either deterring bachelor’s degree holders from disadvantaged and underrepresented backgrounds from pursuing lucrative careers through advanced degree programs or imposing a high cost for entry. We speculate that the ongoing personal financing of advanced degrees, changes to funding in higher education, and increasing returns to and demand for postbaccalaureate degrees have created a perfect storm for those seeking degrees beyond college. We find that aggregate increases in borrowing among advanced degree students between 1996 and 2016 can be explained in part by increasing enrollment rates, particularly among master’s degree students, and large, secular increases in graduate and professional students’ undergraduate and graduate borrowing. In contrast to undergraduate debt alone, the burden of educational debt among graduate borrowers appears to have fallen on students from lower socioeconomic backgrounds and historically underserved students of color more so than their more advantaged counterparts and on women more so than men. However, we also find that median advanced degree wage premia over those of bachelor’s degree holders are substantial for many who graduate with advanced degrees but are particularly high for African American and low socioeconomic status graduates, complicating simple conclusions about the stratification of debt at the postgraduate level.

Financial Stress, Race, and Student Debt During the Great Recession

“…Given that data sources are more likely to include indicators of debt-holding than levels, payments, and debt-to-income ratios, studies of other varied outcomes should consider the possible implications of alternative measures on the mechanisms expected to influence findings. Our results that there were fewer differences on the effects of payments and payment-to-income ratio supports the expectations derived from prior research that institutional differences that affect total loan amounts and wage returns to college are significant drivers of differences in the effect of student debt on financial stress (Pyne and Grodsky 2019; Seamster and Charron-Chénier 2017). The similarity in the payment-to-income ratio across race-ethnic groups provides some basis for cautious optimism that racial and ethnic disparities in student debt—including the associated financial stress during economic downturns—could be reduced if the institutional conditions that drive disparities in monthly burdens and incomes were reduced through anti-racist policies.…”

“…Dwyer et al (2012) find that there are diminishing returns as loan amounts increase for the likelihood of completing college. Pyne and Grodsky (2019) argue that high levels of loans are particularly likely among disadvantaged students pursuing graduate school, a population that may be more likely to experience financial stress. Third, monthly payments capture the impact of student loans on a household’s balance sheet and can be adjusted through the various relief options offered by the federal loan system.…”

Exploring socioeconomic inequalities and access to elite postgraduate education among English graduates

“…While they remain relatively under-researched, similar general trends by socioeconomic background are found across all countries where studies have been conducted, including USA (Mullen et al, 2003;Posselt & Grodsky, 2017;Pyne & Grodsky, 2020), Germany (Neugebauer et al, 2016), Norway (Mastekaasa, 2006), Australia (Department of Education Australia, 2019) and various European countries for doctoral study (Triventi, 2013). There is evidence that some of the differences observed across socioeconomic background are related to the distribution of students from different socioeconomic backgrounds across institutions of different status.…”

Improving Mentorship and Supervision during COVID-19 to Reduce Graduate Student Anxiety and Depression Aided by an Online Commercial Platform Narrative Research Group

“…Graduate students who look for this type of other-directed support by supervisors and mentors are those who have traditionally been referred to as requiring "hand-holding" by graduate faculty [40]. Yet, students have good reason to worry about not doing what is required given the hierarchical relationship between graduate students and their supervisors and mentors when, among other things, a very important consideration for them is the increasing burden of their student debt [41]. There are many considerations regarding how graduate students select those who can advise them given the various limitations imposed by this hierarchical structure [42] including the increasing call to de-colonize supervision in Western universities [43].…”