According to a new report by the Georgetown University Center on Education and Workforce (CEW), graduate degrees (masters, professional, and doctoral) still have the highest potential income yield of any credential—but rising costs of attainment, increased debt loads, and uneven job prospects are eroding confidence in their ROI.

By the numbers:

  • Total graduate enrollment increased 49% between 2000-2020, but direct graduate degree costs (net tuition and fees) have more than tripled in the same time frame.
  • Ballooning cost of attainment leads to increased pressure to take on debt. Since 2000, the median debt principal among graduate student borrowers has risen from $34,000 to $50,000, a 47% increase.
  • Workers with graduate degrees also earn 57% more than other workers, with a median earnings of $99K (compared to $63,000 for all other full-time workers).

    However, earnings vary considerably by degree type, field of study, and occupational choice (highest potential income yield for STEM, lowest for humanities and arts), and the earnings premium across all advanced degree types has not changed much in the last 30 years.

Disproportionate debt burdens: There are two federal loan options to help pay for graduate degrees: Direct Unsubsidized Stafford loans and Grad PLUS. Just 16% of all graduate student borrowers take out Grad Plus loans, but these loans account for one-third (32%) of all federal loan disbursements to graduate students. Grad PLUS borrowers are more likely to be low income (68% earning less than $30,000) and enrolled in a high-cost program. Grad PLUS borrowers are also more likely to be from historically marginalized groups, with Black/African American students particularly overrepresented.

Why it matters: Unlike Direct Unsubsidized Stafford loans, Grad PLUS loans have no annual or aggregate (or, lifetime) borrowing limit. Instead, Grad PLUS loan eligibility caps at an institution’s cost of attendance, meaning that institutions—many of which view graduate studies as a lucrative aspect of their business model and currently have no regulatory incentive to keep the costs of graduate programs affordable—exacerbate debt burdens.

What’s next: There’s been an increased focus on the ROI of graduate programs in D.C. policy conversations. The new Gainful Employment rules include a Financial Value Transparency framework, which will require graduate students to acknowledge viewing information on cost, expected earnings, and debt burden before they enroll.