Featured Article - ‘Financially Hobbled for Life’: The Elite Master’s Degrees That Don’t Pay Off by Melissa Korn and Andrea Fuller

“Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000. Yet two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year.” Thus begins a sobering Wall Street Journal article published last week. The piece, co-written by reporters Melissa Korn and Andrea Fuller, profiles graduates of my alma mater’s M.F.A. film program and their dire financial straits. This story is proof that the nationwide student debt crisis has rendered countless American students “financially hobbled for life.”
 

In one sense, there’s really nothing to report here. We’re used to hearing of graduate students who take on significant debt to pursue degrees in less-than-lucrative fields—fine arts, humanities, education, etc. Why should you care if they make these foolish decisions? Two reasons: elite universities are only making the debt crisis worse, and you, the taxpayer, are on the hook for defaulted federal loans.
 

As the WSJ article explains, many graduate students borrow money for tuition and other expenses via the federal Grad Plus loan program. The problem is, “Unlike undergraduate loans, the federal Grad Plus loan program has no fixed limit on how much grad students can borrow …” University administrators, whether or not they admit it, lean heavily on such programs to pay for other institutional expenses. Some do admit it: “Julie Kornfeld, Columbia’s vice provost for academic programs, said master’s degrees ‘can and should be a revenue source’ subsidizing other parts of the university. She also said grad students need more financial support.”
 

Wait a minute. We need the income from master’s degrees but also need to give grad students more financial support? You can’t have it both ways in any meaningful sense. Either you keep costs high and take the money or you don’t. The vast majority of institutions choose the former option. And Columbia’s not alone—other institutions, such as NYU, Northwestern, and USC, have similar debt-to-earnings ratios in certain master’s programs, as per the Journal article.
 

It’s easy for elite universities to lure students into taking on stifling levels of debt. You’re getting a highly coveted graduate degree from, in this case, an Ivy League institution, one that’s in New York City, a young artist’s paradise. What’s that? $300,000 sounds like too much to borrow? Nonsense! The screenwriter of “Frozen” went here—maybe you’ll end up like her!
 

This is the reasoning these schools use to allay concerns about debt and convince admitted applicants to matriculate. It doesn’t take a rocket scientist (or an M.F.A. film graduate) to understand why this is happening: master’s students bring in boatloads of money, and institutions are not held accountable for the crushing debt their students take on. Administrators can wax poetic all they want about providing grad students “more financial support,” but the numbers don’t lie. They need the cash because their ever-expanding bureaucracy demands it, and naive applicants are willing to take out massive loans to get their shiny new master’s degree.
 

What can be done here? On the student side, we need to get more stories like this out in the open in order to inform prospective students of what student debt actually means. For many, it’s an abstract number that doesn’t feel real in the moment. They don’t know that excessive debt can, quite literally, hobble them for life. On the institutional side, we need to put universities, not taxpayers, on the hook for defaulted loans. As National Association of Scholars Research Associate Neetu Arnold argues in her February report Priced Out: What College Costs America, this is key to mitigating the student debt crisis:
 

Higher education has no skin in the game when it comes to student outcomes. Colleges and universities should be required to accept a portion of the responsibility for loans (including accruing interest) defaulted on by students who dropped out from their institutions, to be repaid to lending institutions over a certain time period.
 

Measures like this would force institutions to lower costs and thereby lower student debt. Universities must not be allowed to continue fooling students into six-figure debt with impunity. But they will unless and until lawmakers change America’s student debt apparatus. As we know, money talks.
 

Until next week.
 

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