Urban Institute Research: Which Graduate Programs Create Greatest Student Debt Loads?

Want to become a social worker and not finish graduate school with crippling debt? You might want to avoid private colleges. New research from the Urban Institute shows that private colleges and universities, both for-profit and non-profits, are more significant drivers of high levels of debt from master’s degrees than public institutions.

Return on investment (ROI) is a big deal in higher education. As the cost of college continues to climb, it is understandable that researchers, policymakers, and students are interested in whether they will get a return on what is often the most significant financial investment a person makes outside of buying a house.

The focus on ROI and debt to income ratios has been mainly aimed at undergraduate education, but graduate degrees, particularly master’s programs, drive a considerable portion of student loan borrowing. So, asking whether graduate degrees for professions like counseling and social work provide students with a good return on investment is very reasonable. It is particularly reasonable given the reality that federal borrowing for graduate education is only limited by the cost of the program. Undergraduate borrowing, by comparison, is much more restricted, except for the Parent PLUS program, a tragedy in its own right.

Which types of grad programs lead to high debt and low income?

The research by Jason Delisle and Jason Cohn at the Urban Institute looks at graduate programs that lead to high debt and relatively low earnings. They find that public colleges are much less likely than private institutions to leave graduates with high levels of debt relative to incomes. These findings are similar to other research that has looked at undergraduate education and has found public institutions are more likely to provide graduates with a better return on investment when it comes to earning potential compared to debt than private institutions.

Delisle and Cohn find that the three types of programs most likely to leave graduates with high levels of debt relative to income are social work, counseling and applied psychology degrees, and mental health and social services degrees. These fields generally require master’s degrees to practice and tend to have relatively low pay levels compared to other occupations that require graduate-level education.

The research found that private non-profit institutions are home to 44 percent of all master’s degree programs but account for 75 percent of the programs tagged as having a high debt to income level.

The report notes that many programs in fields like social work do not load students up with unsustainable debt. Public institutions offer programs with lower debt-to-earnings rates, with debt levels for students who earn their degrees in the public sector $20-30,000 lower than those who attend private non-profits. Tuition tends to be much lower at public institutions, with earnings rarely increasing for students who attend a private institutions.

Wage disparities complicate the story

The research does not address the reality that the fields with poor debt to earnings outcomes are majority women occupations, often minoritized women at that. For example, 90 percent of new social workers are women, 22 percent are Black, and 14 percent are Hispanic/Latino. Women, and minority workers, earn less than men and White workers, regardless of field. The reality of wage disparities makes poor debt to earnings outcomes in particular job fields a complex problem.

Even after accounting for gender and racial wage disparities, The evidence suggests that most students who wish to enter professions like counseling and social work will be better served financially by attending public institutions for their training.

The high cost of college, including graduate education, continues to be hugely challenging for policymakers to solve. However, one thing is clear; public institutions are much less likely to be the driving force behind high debt levels than their private counterparts.